Based on purchasing power parity theory, should the Canadian Dollar, appreciate or depreciate? Please provide ample justification. The...

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Based on purchasing power parity theory, should the CanadianDollar, appreciate or depreciate? Please provide amplejustification.
The currency of the country with a lower i rate should be atforward premium in terms of the currency of the country with ahigher rate, so that the interest rate differential should be equalto the forward differential

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Here 1 Canadian Dollar equals 076 United States Dollar Its mean Canadian dollar is cheaper than US dollar But the the theory of purchasing power paritystates that the exchange rate between one currency and another currency is in equilibrium when their domestic See Answer

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Based on purchasing power parity theory, should the CanadianDollar, appreciate or depreciate? Please provide amplejustification.The currency of the country with a lower i rate should be atforward premium in terms of the currency of the country with ahigher rate, so that the interest rate differential should be equalto the forward differentialThat is the full question. No other information has beenprovided.