On Friday, September 13, 1992, the lira (Italian currency during that time) was worth DM 0.0013065 (DM-Deutsche Mark, Germain official currency during that time). Over the weekend, the lira against the DM was worth DM 0.0012613.

d. Suppose that over the weekend the lira against the DM was worth DM 0.0014613. i. By how much has the lira appreciated/depreciated against the DM? (2 marks) (2 marks)

iii. Suppose Germany bank borrowed Lira 40 million at zero interest rate, which it sold to prop up the DM. What were the Bank of Germany's DM profit/losses on this currency intervention? (4 marks)