Answer :
Answer:
The U.S $ is worth more than the Can $.
Explanation:
We are given that,
The spot exchange rate for the Canadian dollar = Can $1.14
The six-month forward rate is Can $1.16.
Since the U.S $1 = Can $1.14, it implies that U.S $1 will buy Can $1.14
The six months forward rate implies the U.S.$1 we now buy Can $1.16
This means that the U.S dollar is appreciating against the Can $.
The U.S $ is, therefore, worth more than the Can $.