You sell 250,000 pesos short at the exchange rateof S(Peso/$)=18.9. Calculate your profit/loss if theending exchange rate is S(Peso/$)=22.2 after aweek. (Please keep the sign and two decimalplaces in your answer.)

1. Initial Sale (Short Sale) in Dollars:o Initial exchange rate S0 =18.9 pesos per dollar.o Amount…

Answered: You sell 250,000 pesos short at the…

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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You sell 250,000 pesos short at the exchange rate of S(Peso/$)=18.9. Calculate your profit/loss if the ending exchange rate is S(Peso/$)=22.2 after a week. (Please keep the sign and two decimal places in your answer.)