1. How could you profit if you see these rates on the spot exchange market? e$/£ = 1.6; e$/Fr = 0.6; eFr/£ = 3.2.
1) Use Fr to buy $; then use $ to buy £; last use £ to buy Fr
2) Use $ to buy Fr; then use Fr to buy £; last use £ to buy $
3) Use £ to buy $, then use $ to buy Fr, last use Fr to buy £.
4) Use Fr to buy £, then use £ to buy $, last use $ to buy £.
5) All of the above.
2. When many more international students come to the United States to pursue a bachelor's or a graduate degree, how does this event affect the exchange rate of US dollar?
1) US dollar is appreciated.
2) US dollar is depreciated.
3) The event does not affect the exchange rate of US dollar.
4) It is impossible to determine.