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It is the year 2035 and the Australian government entered into a target-zone arrangement with the UK. Australian firm K-Roo has a GBP 250,000 payable
It is the year 2035 and the Australian government entered into a target-zone arrangement with the UK. Australian firm K-Roo has a GBP 250,000 payable due in 180 days. Assuming the current exchange rate is AUD1.53/GBP, the central rate for the AUD/GBP is set at 1.77 AUD per GBP, and the currencies are allowed to fluctuate with a 13% band on either side, what is the maximum possible amount (in terms of AUD ) that K-Roo could lose due to changes in the future exchange rate? a. 2,475 b. 49,725 c. 117,525 d. 57,525 e. 222,895
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