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Question 11 according to purchasing power parity ppp

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Question 11According to purchasing power parity (PPP), which of these options istrue?
Question 12Ignore all bid-ask spreads. You are a Canadian foreign exchange trader. The current spot exchangerate is CADUSD = 0.8927 and the 6-month forward exchange rate is 0.8749. If the current 6-monthinterest rates are 2.4% (annualised) for US dollars and 3.05% (annualised) for Canadian dollars.You note that there is an arbitrage opportunity. You are authorised to borrow or lend up to CAD10 million today. The arbitrage profit you can make is closest to:

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