1. Assume that the Canadian inflation rate is expected to exceed the U.S. inflation rate over the next year. If interest rate parity and the international Fisher effect theories hold, then the one-year forward rate of the Canadian dollar will exhibit a _______, and the spot rate of the Canadian dollar will _____________ over the next year.
a. premium; depreciate
b. premium; appreciate
c. discount; depreciate
d. discount; appreciate
2. Traditionally, the most popular company-wide base for allocating overhead to products was:
A. machine hours.
B. direct labor hours or costs.
C. number of units produced.
D. number of units sold.