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Over the next year, inflation in Canada is expected to be 1.1% and it is expected to be 1.5% in the U.S. The price of a Big Mac in the U.S. is $4.99 and the price in Canada is C$6.29. What is the implied PPP of the Canadian dollar per U.S. dollar right now? (No currency labels are necessary, round answer to two decimal places)

2. The treasurer of a German company operating in Australia considers a 180-day bank loan of €400,000 with an interest rate of 4.00% (euro based). The current spot rate is 1.5600A$/€ and a local loan in Australian dollars (A$) would carry a rate of 4.2%. Expected inflation rates are 2.0% and 3.0% in Australia and in Europe, respectively, for the coming year. According to purchasing power parity, what is the effective cost of A$ funds for the German company? (Round percentage answer to two decimal places and answer X.XX% as X.XX, without the percentage sign)

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