Question

In December 2017, an American investor buys 1,000 shares in a Mexican company at a price of 500 pesos each. The share does not pay any dividend. A year later she sells the shares for 550 pesos each. Assume the exchange rate when she buys the stock is 19.131. Suppose that the exchange rate at the time of sale is 20 pesos = $1, answer the following requirements.

1. a. How many dollars does she invest? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

2. b-1. What is her total return in pesos? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

3. b-2. What is her total return in dollars? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

4. c. Do you think that she has made an exchange rate profit or loss?

a.	Dollars invested:
b-1	Total Return		%
b-2	Total Retun		%
C	She has made an exchange rate:

Answer 1

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