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Real-Life Activities

Real-Life Decision Making -- Solution

You decide to charge 0.011964 and make zero profit.

This is the real-life decision made by currency broker Jean Klimchuk.

"Sometimes you have to make a decision that will not result in any financial gain for you, just to win over a client," says Klimchuk.

Klimchuk went on to say that in this case, the bank offered the businessman a preferential rate. The bank had also been able to buy the yen at the lower rate and was able to sell it to the businessman at that lower rate.

The bank's rate was only marginally different from the rate offered by Klimchuk, so because the client appreciated Klimchuk's effort, he went with him. As a result, Klimchuk gained a new client. He noted that subsequent deals made up for what he didn't make on the first exchange.