Question: In 2 0 0 1 , right after the introduction of the Euro, a German pension fund made its first investment in the U .

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):
 In 2001, right after the introduction of the Euro, a German

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