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Homework answers / question archive / In alternative universe, the Australian government has decided to enter into a target-zone arrangement with the United States

In alternative universe, the Australian government has decided to enter into a target-zone arrangement with the United States

Finance

In alternative universe, the Australian government has decided to enter into a target-zone arrangement with the United States. Australian firm K-Roo has a USD 150,000 payable due in 180 days. Assuming the current exchange rate is AUD1.44/USD, the central rate for the USD/AUD is set at 0.5 USD per AUD, and the currencies are allowed to fluctuate with a 10% 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?

Select one: a. 114000.00 b. 101416.67 c. 133500.00 d. 21600.00 e. -54000.00

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