Posted by linda on .
I have a currency conversion problem that I have found difficult to solve.
Suppose that a currency speculator believes that as time goes on the exchange rate is going to fall. On November 1st the speculator converts $1,000 US into Canadian dollars (just call the converted amount C) and sets that money aside for a period of one month.
On December first, the exchange rate has fallen to 1.2501 and the speculator converts those C Canadian dollars back into US dollars.
How much does she have in US dollars on December 1st? How much money has she made in her speculation? [keep in mind that the conversion rate that is given is for converting from US to Canadian dollars, not from Canadian to US dollars.]