In 2001, right after the introduction of the Euro, a German pension fund made its first investment in the U.S. It acquired a $100 million office building in a primary market. At the time the exchange rate between Euro and US $ was $0.88 (i.e. it "cost" $0.88 to buy 1 Euro). Today, the office building acquired in 2001 has appreciated by 20%. The pension fund (PF) needs to liquidate its investment (as it has to meet its pension obligations). According to its CPA, the PF will have to realize a loss of approximately $6.5 million on its books (which are kept in Euros). The CEO of the PF is stunned, as s/he had been told over the years that the asset "was doing nicely and appreciating in value". S/he vows never to invest in U.S. real estate again. Is the CEO's assessment correct? Please discuss, and - if possible - try to outline strategies that could have prevented or minimized the loss experienced in the example above. In your assessment, disregard the fact that the asset may have produced positive cash flows during the holding period