Suppose you are a U.S. investor who is planning to invest $845,000 in Mexico. Your Mexican investment gains 10.6 percent. If the exchange rate moves from 12.8 pesos per dollar to 13.1 pesos per dollar over the period, what is your total return on this investment? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
Suppose you are a U.S. investor who is planning to invest $845,000 in Mexico. Your Mexican investment gains 10.6 percent. If the exchange rate moves from 12.8 pesos per dollar to 13.1 pesos per dollar over the period, what is your total return on this investment? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Suppose you are a U.S. investor who is planning to invest $845,000 in Mexico. Your Mexican investment gains 10.6 percent. If the exchange rate moves from 12.8 pesos per dollar to 13.1 pesos per dollar over the period, what is your total return on this investment? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
Expert Solution
Step 1
DATA GIVEN:
Investment amount = $845,000
Investment gain in Mexico = 10.6%
Exchange rate:
Original ex. rate 1$= P 12.8
Changed ex. rate 1$ = P 13.1
Required: Total return on this investment
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