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23 March, 10:14

My name is Maurice. I have $8,000 in FXCM (Foreign Exchange Market). I am considering converting dollar to Euro now. The rate I apply now (first exchange rate conversion) is 0.88 Euro/$. In the evening, I bet the rate will be favorable to me. Let's assume there are no service fees about this process. If I strongly believe in my speculation, and I want to make at least $600 profit from this process, what should be the exchange rate for the 2nd conversion to meet my profit target

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  1. 23 March, 12:27
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    New rate must be less than or equal to 0.82 euro per dollar

    Explanation:

    Less than or equal to 0.82 Euro/$

    Reason: Current rate = 0.88 Euro per dollar

    This gives Maurice = $8000 x 0.88 = 7040 euros

    Profit needed = $600

    This means upon second conversion, Maurice must get $8000+$600 = $8600

    Now, let us suppose morning rate is 0.89 euro per dollar

    This gives 7040/0.89 = $8186 (not favorable)

    If morning rate is 0.82 euro per dollar

    This gives 7040/0.82 = $8585 (close to $8600)

    Thus, new rate must be less than or equal to 0.82 euro per dollar
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