Alan and Bob each own a bar. Alan's is in very northern New York, and Bob's is just across the border in Canada.

As it turns out, at the beginning of this problem, a Canadian Dollar is worth exactly the same as the U.S. Dollar, and people are quite accustomed to using them interchangeably (including banks).

But, alas, the U.S. Government and the Canadian government get in a spat. So, the U.S. "devalues" the Canadian dollar 10%, so now they will treat it as worth 90 cents (U.S. currency). In retaliation, Canada does the same and "devalues" the U.S. dollar 10%, so they treat it as worth 90 cents (Canadian currency).

Enter Charlie.

Charlie goes to Alan's bar and purchases a 1 dollar drink and pays with a 10 dollar bill (U.S.). He receives, in change, a 10 dollar bill (Canadian). He then walks across the border to Bob's bar and purchases another 1 dollar drink, paying with a 10 dollar bill (Canadian), and he receives, in change, a 10 dollar bill (U.S.).

Charlie proceeds to continue doing this until he finds himself quite intoxicated.

I think it obvious that Charlie is gaining on these transactions. The question is.... WHO (if anyone) is losing out on these transactions?

hi dudes
as pointed out that such kind of transactions are not possible
i am an Indian and i love such beautiful situations
it so happened that i was in malaysia a month back
1 malay ringgits is 12.5 Indian Rs and 1 American dollar is 44.5 Rs and 1 singapore dollar is 21.25 Rs values have changed since the point i am trying to make is that 1$ is taken as 3.7
Ringgits in malaysia and 2.2 in Singapore smartly if you look at these rates u can end up making huge profits 1000$ costing me 44500 Rs i got them converted in Ringgits and Singapore dollars 1850 ringgits and 1100 sing dollars i got them converted into Rs the seeling price is little lower 12.05 and 21 45392.5 Rs. i got it back which is close to 800 Rs more than what i actually took but than u got to play it very sharp and convert more frequently in an absorbing way
lastly i would say that whenever u need some exchange u have to play it cool it is a practice that if u give a higher value currency than its worth is cool so to counter this u need to most of the times ask a vauge amount of the currency you want the conversion to take place into by doin so u can ensure that your smaller denomination currency will fetch u the same result as the higher ones this works out 9 in 10

Posted by Rohan Shah on 2004-03-29 14:39:48