Problem
1. Assume the following exchange rates are quoted on a particular day: £1 = 3DM, £1 = $1.8 and $1 = 4DM. How can an investor with .elm make a riskless gain by buying and selling currency on the foreign exchanges?
2. If the forward rate of exchange is at a discount, what does this tell you about the expected future spot rate?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.