Suppose you work for a firm that has $10 million in excess cash to invest for one month. Your task is to invest this money in the foreign exchange market to earn a profitholding dollars is not an option.

Select the currencies you wish to buy at todays spot rate, but do not buy less than $2.5 million of any single currency. Track the spot rate for each of your currencies over the next 4 weeks in the business press.

On the last day of the four-week period, exchange your currencies at the days spot rate. Calculate your gain or loss over the period. Comment on your reasons for choosing the currencies that you did and their performance over the period.