A French institutional investor wishes to decrease its exposure to Taiwan
Question:A French institutional investor wishes to decrease its exposure to Taiwan. It is interested in selling 20,000 shares of a particular Taiwanese firm that is currently in its portfolio. This firm trades on the Taiwan Stock Exchange. A Taiwan-based broker quotes the Taiwan dollar (TW$) price of the shares of this firm as 150.35-150.75, with a commission of 0.10 percent of the transaction value. The Taiwan Stock Exchange charges a tax of 0.30 percent of the value traded from the seller. A bank is quoting the TW$ to € exchange rate as 32.8675-32.8800. How many euros will the French institutional investor receive on selling the shares?Answer:
To summarize, The receipt in TW$, after excluding commission and transaction tax, would be TW$150.35/share × 20,000 shares × (1 - 0.0010 - 0.0030) = TW$2,994,972. So, the receipt in euros would be TW$2,994,972 /( TW$ 32.88 per €) = €91,087.96.
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