The following sales revenue pattern is for a British trading concern.

2009 2010 2011

Sales revenue 23,500 28,650 33,160

Required:

a. Perform a convenience translation into U.S. dollars for each year given the following year-end exchange rates:

2009 1 = $2.10

2010 1 = $2.20

2011 1 = $1.60

b. Compare the year-to-year percentage changes in sales revenues in pounds and in U.S. dollars. Do the two time series move in parallel fashion? Why or why not?

c. Suggest a method for minimizing the effect of exchange rate changes on foreign currency trend data.