Banjo who lives in Sydney purchased 50 shares of Deutsche Bank, a German stock traded on the Frankfurt Exchange for €10 per share exactly one year ago when the exchange rate was 1.6 A$/€ (i.e., €1 was worth A$1.6). Today the stock is trading at €7 per share and the exchange rate is 1.55 A$/€.
a. Did the € depreciate or appreciate relative to the A$ during the year? Explain.
b. How much in A$ did Banjo pay for his 50 shares of Deutsche Bank when he purchased them?
c. For how much in A$ did Banjo sell his Deutsche Bank shares today?
d. Ignoring brokerage fees and taxes, how much profit (or loss) in A$ will Banjo realize if he sells the stock today?