Frank sells Sue a horse for $60, then decides that he wants it back. Sue makes him pay $70 for it, then decides that she wants it after all. Frank is no dummy. He sells it back to her for $80. At the end, Frank buys it once more from Sue for – you guessed it – $90. Who came out ahead?
Solution
Because Frank both starts and ends with the horse, it can be discounted; There has been no net change in it's ownership. All that remains is to follow the money.
Sue first gives Frank $60. He then gives her $70 and is down $10. Sue then gives Frank $80. He is now effectively up $70. Next, he pays Sue $90. and is down $20. Frank's loss is Sue's gain. Seems she's no dummy either.