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**Could you double check this for me. Thank you** You have just received good news. You have a rich uncle in France who has decided

**Could you double check this for me. Thank you**

You have just received good news. You have a rich uncle in France who has decided to give you a monthly annuity of 2,000 per month. You are concerned that you will become accustomed to having these funds, but if the currency exchange rate moves against you, you may have to make do with less.

A. If you are living in Canada, what does it mean for the currency exchange rate to move against you?

The value of the Canadian dollar falls with respect to that of the Euro, thus the amount you receive in Canadian dollars is reduced.

B. Would moving to France mitigate some of the risk? If so, how? If not, why not?

Yes, moving to France will eliminate exchange rate risks associated with the conversion of currency, as the Euro is valid in France. However, there may be additional associated costs, such as the costs of moving, finding housing in France, etc.

C. If you want to stay in Canada, and your grandparents, who have retired to Provence, receive a Canadian pension of C$1100 each, what could you do to reduce the risk for all of you?

The pension amount of $1,100 Canadian should be taken to avoid the exchange rate risk associated with them and the amount that is equivalent to C$1,100 in Euro should be retained by the grandparents in France. The difference amount in Euro 2,000 can be deposited to the grandchild in Canada. It will reduce the amount involved in the exchange rate risks.

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