Mac OS X 10.12 using recovery partition with parallels 12.1.1 (41491) only gets 1024x768 screen ...

I installed Mac OS X 10.12 using recovery partition with parallels 12.1.1 (41491). No matter what I do in configuration of the VM (under Hardware/Graphics) it starts in 1024x768 and when I open mac os system setting and then display the only alternative resolution is 1024x768. I have a 5K iMac ...

I've tried all 3 radio buttons for resolution options and different graphics memory, but nothing changes. I still get 1024x768.

In general there seem to be no support for 5K screen resolution! When I start older VM:s that still works with higher resolutions that 1024x768, the highest I can get is MacBook Pro retina resolution at around 3000 pixels horizontal. My 5k screen has 5000 something pixels. This have the effect that everything looks really bad. Since the 5K iMac has been around for some time now I find this lack of support for it very strange.

 

I made one more test: Started OS X Sierra VM, while running I made changes in View->Retina Resolution menu. Absolutely nothing happened, no matter what I selected. I went through all 3 options.

 

I have to admit to feeling rather stupid right now! I forgot to install Parallels Tools!
When those were installed I got the full resolution of the computer.