Question: Suppose the central rates within the ERM for the French

Suppose the central rates within the ERM for the French franc and DM are FF 6.90403: ECU 1 and DM 2.05853: ECU 1, respectively.
a. What is the cross-exchange rate between the franc and the mark?
b. Under the former 2.25% margin on either side of the central rate, what were the approximate upper and lower intervention limits for France and Germany?
c. Under the new 15% margin on either side of the central rate, what are the current approximate upper and lower intervention limits for France and Germany?


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  • CreatedJune 27, 2014
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