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H B c D E F G 1 Question 2 (3 marks) 2 The Channel Tunnel or Chunnel passes underneath the English Channel between Great

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H B c D E F G 1 Question 2 (3 marks) 2 The Channel Tunnel or "Chunnel" passes underneath the English Channel between Great Britain and France, a 3 land-link between the Continent and the British Isles. One side is therefore an economy of British pounds, the 4 other euros. If you were to check the Chunnel's rail ticket Internet rates you would find that they would be 5 denominated in U.S. dollars (USD). For example, a first class round trip fare for a single adult from London to 6 Paris via the Chunnel through RailEurope may cost USD170.00. This currency neutrality, however, means that 7 customers on both ends of the Chunnel pay differing rates in their home currencies from day to day. What is the 8 British pound and euro denominated prices for the USD170.00 round trip fare in local currency if purchased on 9 the following dates at the accompanying spot rates drawn from the Financial Times? 10 11 Roundtrip RailEurope $170.00 12 13 British pound Euro British pound Continental 14 Spot Rate train fare train fare 15 Date of Spot Rate (E/S) (/S) () 16 Monday 0.5702 0.8304 17 Tuesday 0.5712 0.8293 18 Wednesday 0.5756 0.8340 19 Spot Rate

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