M&B3 3rd Edition by Dean Croushore

Exercise 1

Table 1 shows the exchange rates of various currencies versus the dollar. Use the information in the table to show how you could have profi ted by trading currencies if the exchange rate be-tween French francs and German marks was 3 francs per mark on January 1, 1990. Suppose that you began with 10,000 marks. Show what trades you could have made buying or selling francs, marks, and dollars to generate a profi t and how much money you could make.
Table 1 Exchange Rates Since 1970