ZuoTi.Pro
Question

An investor in the United States bought a one-year Brazilian security valued at 370,000 Brazilian reals...

An investor in the United States bought a one-year Brazilian security valued at 370,000 Brazilian reals (R$). The U.S. dollar equivalent was $320,000. The Brazilian security earned 12 percent during the year, but the Brazilian real depreciated 5 cents against the U.S. dollar during the time period ($.86 to $.81). After transferring the funds back to the United States, what was the investor’s return on her $320,000?

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Investment in Brazilian Security = 370000 Brazilian

Brazilian security earned 12 percent during the year

Value after an year of Brazilian Security = 370000*1.12 = 414400 Brazilian

1 Brazilian = $0.81 after an year

So, 414400 Brazilian is 414400*0.81 = $335664

Initial Investment = $ 320000

Rate of Return = (335664/320000)-1 = 4.89%

0 0
Add a comment
Know the answer?
Add Answer to:
An investor in the United States bought a one-year Brazilian security valued at 370,000 Brazilian reals...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • S IDF PROBLEM 4-ADJUSTING RETURNS FOR EXCHANGE RATES An investor in the United States bought a one-year Brazilian security valued at 195,000 Brazilian reals The US dollar equivalent was $100,000....

    S IDF PROBLEM 4-ADJUSTING RETURNS FOR EXCHANGE RATES An investor in the United States bought a one-year Brazilian security valued at 195,000 Brazilian reals The US dollar equivalent was $100,000. The Brazilian security earned 16% during the year, but the Brazilian real depreciated $0.05 against the US dollar during the time period ($0.51 to $0.46) After transferring the funds back to the United States, what was the investor's return on the $100,0002 Determine the total ending value of the Brazilian...

  • S IDF PROBLEM 4-ADJUSTING RETURNS FOR EXCHANGE RATES An investor in the United States bought a...

    S IDF PROBLEM 4-ADJUSTING RETURNS FOR EXCHANGE RATES An investor in the United States bought a one-year Brazilian security valued at 195,000 Brazilian reals The US dollar equivalent was $100,000. The Brazilian security earned 16% during the year, but the Brazilian real depreciated $0.05 against the US dollar during the time period ($0.51 to $0.46) After transferring the funds back to the United States, what was the investor's return on the $100,0002 Determine the total ending value of the Brazilian...

  • Calculate the nominal U.S. dollar rates of return to a Los Angeles-based investor on the following...

    Calculate the nominal U.S. dollar rates of return to a Los Angeles-based investor on the following asset purchases. Assume that all of the LA investor’s consumption takes place in the United States. a.  A US$100,000 deposit in Banco Santander during a one-year period in which the €/US$ exchange rate moved from 1.100 to 1.111 and the interest rate on euro deposits was 2.5 percent b.  A Seattle office building that was purchased for US$100 million and sold for US$102 million during a...

  • Volkswagen's Hedging Strategy 1. Why did Volkswagen suffer a 95% drop in its 4th quarter, 2003 pr...

    Volkswagen's Hedging Strategy 1. Why did Volkswagen suffer a 95% drop in its 4th quarter, 2003 profits? 2. Do you think the Volkswagen’s decision to hedge only 30% of its anticipated U.S. sales was a good? Why or why not? 3. Do you think the Volkswagen’s decision to revert back to hedging 70% of its foreign currency exposure was a good decision? Why or why not? Embraer and the Wild Ride of the Brazilian Real 4. Is a decline in...

  • 1. The following events occurred in 2020 in the United States. In column i write either...

    1. The following events occurred in 2020 in the United States. In column i write either “included” or“not included”in gross domestic product (GDP) for 2020 and in column ii explain why a. EXAMPLE PROBLEM Buy a new textbook from a bookstore i. included ii. C; final good b. McGraw-Hill (publisher) buys paper for its textbooks from a U.S. supplier i. ii. c. The purchase of U.S. lumber by a contractor used to build a house in SouthWest Florida. i. ii....

  • Case assignments must be completed with a written 2-page study on the assigned case questions in...

    Case assignments must be completed with a written 2-page study on the assigned case questions in the textbook. The format requested for these assignments is based on elaborating and including two basic parts in the essay: 1) in a bullet presentation style (one phrase each bullet), list a summary of the key issues, situations, problems, opportunities and threats you may identify as relevant; 2) answer all the questions listed in each case in two or three sound paragraphs. Use the...

  • Can Technology Save Sears? Sears, Roebuck used to be the largest retailer in the United States, w...

    Can Technology Save Sears? Sears, Roebuck used to be the largest retailer in the United States, with sales representing 1 to 2 percent of the U.S. gross national product for almost 40 years after World War II. Since then, Sears has steadily lost ground to discounters such as Walmart and Target and to competitively priced specialty retailers such as Home Depot and Lowe’s. Even the merger with Kmart in 2005 to create Sears Holding Company failed to stop the downward...

  • Case: Criticizing customers. Short-changing workers. Sassing regulators. Deceiving authorities. Emphasizing rule breaking and ruthlessness in a...

    Case: Criticizing customers. Short-changing workers. Sassing regulators. Deceiving authorities. Emphasizing rule breaking and ruthlessness in a “win at all costs” workplace culture. Is this what it takes to go from startup to a $70 billion business in only seven years? Or are these characterizations false, the criticisms of jealous rivals? Let’s take an extended look at the exciting journey of the low-cost ridehailing service known as Uber, or Uber Technologies Inc., one of the leading transportation services of the world....

  • do SWOT analysis. CASE 01 Mystic Monk Coffee connect . David L. Turnipseed University of South...

    do SWOT analysis. CASE 01 Mystic Monk Coffee connect . David L. Turnipseed University of South Alabama . wishing to donate to the monks' cause. Father Prior Daniel Mary did not have a great deal of experience in business matters but considered to what extent the monastery could rely on its Mystic Monk Coffee operations to fund the purchase of the ranch. If Mys- tic Monk Coffee was capable of making the vision a reality, what were the next steps...

  • CASE 1-5 Financial Statement Ratio Computation Refer to Campbell Soup Company's financial Campbell Soup statements in...

    CASE 1-5 Financial Statement Ratio Computation Refer to Campbell Soup Company's financial Campbell Soup statements in Appendix A. Required: Compute the following ratios for Year 11. Liquidity ratios: Asset utilization ratios:* a. Current ratio n. Cash turnover b. Acid-test ratio 0. Accounts receivable turnover c. Days to sell inventory p. Inventory turnover d. Collection period 4. Working capital turnover Capital structure and solvency ratios: 1. Fixed assets turnover e. Total debt to total equity s. Total assets turnover f. Long-term...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
Active Questions
ADVERTISEMENT