(1)use dm 1.45 to buy$1 in new york and sell$1 in frankfurt,get dm 1.46.you get dm 0.01. (2) fixed buy £ with your$1,000,000,hold £500,000 for 1 year period and get interst £(500,000*16%)=80,000,then buy back$with all your £580,000,you get$1,160,000. however if you hold initial$1,000,000 for 1 year period,you only get$1,120,000. you win$40,000 via buy and hold £. floating you may not get th** part profit as in fixed through hold £.as i year later when buy back$,the exchange rate may change to £1=$2.1 or even higher. you h**e to face some r**k if your still do the same trade as in fixed rate. but for carry trade player,they generally put their money in high yiled currency.