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What price will the funds manager need to sell australian

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Reference no: EM132968242

A German-based managed fund is seeking to diversify their portfolio internationally by investing in an Australian equity investment. The fund currently has EUR500,000 to invest and wishes to increase this by 20% over the next year (12 months). The current Australian dollar-Euro exchange rate is EUR0.6500 and the Australian equity investment is current trading at a price of AUD20.00.

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Problem 1: If the Australian dollar-Euro exchange rate is expected to change to EUR0.6200 over the next year, at what price will the funds manager need to sell their Australian equity investment in one-year's time? Show all working.

Reference no: EM132968242

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