ANS. a) (i) What are four main risks which an Australian investor faces when investing in overseas equity markets? (ii) Briefly explain two ways by which such an investor who has made such an investment may reduce these risks. b) The following indirect rates against the Australian dollar are available. T120 Mid-Trimester Assessment: FIN201 UG - Investment Management Page 5 of 12 ANS. USD/AUD 0.5923. GBP/AUD 0.5137. Calculate the cross rate, viz., the GBP/USD rate, and provide a brief interpretation of what this rate means c) Lisa Brown, an Australian investor, bought a French-based investment at a price of EUR105,000. One year later, Lisa Brown sold the investment for EUR136,500. Over the time of her investment, the EUR/AUD exchange rate rose by 25%. What was Lisa's overall percentage retum in AUD? Show all calculations, and the answer as a percentage correct to 2 decimal places.