Question 4 (total of 10 marks): An investor has some Australian and Indian assets and liabilities as follows: AUD 600,000 apartment which is partly financed with a loan. AUD 500,000 mortgage loan. AUD 5,000 in her deposit account at the bank. INR 1,470,000 in Indian shares. Note the shares are denominated in Indian Rupee (INR), not Australian Dollars (AUD). The current exchange rate is 0.7 USD = 1 AUD. The current exchange rate is 70 INR = 1 USD. Note that this exchange rate is not per AUD. It's in INR per USD. Give your answer as a decimal correct to at least 6 decimal places. So for example if your answer is 1.23456789%, write 0.0123456789. If your answer is 400,000, write 400000. Do not use percentages and do not write units (m or k) after the number. Question 4a (2 marks): What is the investor's net wealth? State your answer in AUD. Answers: Question 4b (1 marks): What is the weight of the asset class real estate in the investor's net wealth? Answers: Question 4c (1 marks): What is the weight of the asset class debt in the investor's net wealth? Remember that all things that have characteristics of debt should be included in the asset class debt. Answers: Question 4d (2 marks): What new INR per AUD exchange rate would cause the investor's wealth to be AUD 150,000? Assume that the shares remain the same value in INR. State your final answer in INR per AUD. For example, if you thought the answer was 60 INR per AUD, write 60. Answers: Question 4 (total of 10 marks): An investor has some Australian and Indian assets and liabilities as follows: AUD 600,000 apartment which is partly financed with a loan. AUD 500,000 mortgage loan. AUD 5,000 in her deposit account at the bank. INR 1,470,000 in Indian shares. Note the shares are denominated in Indian Rupee (INR), not Australian Dollars (AUD). The current exchange rate is 0.7 USD = 1 AUD. The current exchange rate is 70 INR = 1 USD. Note that this exchange rate is not per AUD. It's in INR per USD. Give your answer as a decimal correct to at least 6 decimal places. So for example if your answer is 1.23456789%, write 0.0123456789. If your answer is 400,000, write 400000. Do not use percentages and do not write units (m or k) after the number. Question 4a (2 marks): What is the investor's net wealth? State your answer in AUD. Answers: Question 4b (1 marks): What is the weight of the asset class real estate in the investor's net wealth? Answers: Question 4c (1 marks): What is the weight of the asset class debt in the investor's net wealth? Remember that all things that have characteristics of debt should be included in the asset class debt. Answers: Question 4d (2 marks): What new INR per AUD exchange rate would cause the investor's wealth to be AUD 150,000? Assume that the shares remain the same value in INR. State your final answer in INR per AUD. For example, if you thought the answer was 60 INR per AUD, write 60. Answers
