(a) James is US investor, just sold a share of BMW company from German with €5,650. The share was bought for €4950 a year ago. The exchange rate is €0.84 per dollar now and was €0.85 per dollar a year ago. James received €90 as a cash dividend immediately before the share was sold. Compute the rate of return in this investment in terms of U.S dollars. (b) George is an investor from Canada. He owns one bond which located in London Stock Exchange (LSE). The bond has issued with coupon rate of 10 percent and face value at CND1,000. At the end of the year the bond was priced at CND1,100. Because of the bond will mature in one year, the exchange rate goes from $1.2443/CND to $1.3545/CND. Determine the rate of return in dollar terms with total dividend is CND25.

(a) James is US investor, just sold a share of BMW company from German with €5,650. The share was bought for €4950 a year ago. The exchange rate is €0.84 per dollar now and was €0.85 per dollar a year ago. James received €90 as a cash dividend immediately before the share was sold. Compute the rate of return in this investment in terms of U.S dollars. (b) George is an investor from Canada. He owns one bond which located in London Stock Exchange (LSE). The bond has issued with coupon rate of 10 percent and face value at CND1,000. At the end of the year the bond was priced at CND1,100. Because of the bond will mature in one year, the exchange rate goes from $1.2443/CND to $1.3545/CND. Determine the rate of return in dollar terms with total dividend is CND25.

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

See similar textbooks

Similar questions

Hui purchased US$11,000 from a bank in America, which charged him a commission of 0.6%, and sold the US dollars to a bank in Canada, which charged him a 0.24% commission. How much money did he lose or gain? Assume that the exchange rate was C$1 = US$0.8958. C$ Round to the nearest cent Answer as positive is there was a gain, and negative if there was a loss 1,279.53 X
You are a U.S. investor who purchased British securities for £2,000 one year ago when the British pound cost U.S.$1.50. What is your total return (based on U.S. dollars) if the value of the securities is now £2,400 and the pound is worth $1.45? No dividends or interest were paid during this period.
Before boarding his flight to Zurich, Switzerland, Ian purchased CHF900 from his bank when the exchange rate was C$1 = CHF0.9753. However, Ian had to cancel the trip. Ian returned to the bank to convert the Swiss currency back into Canadian dollars. If the exchange rate changed to C$1 = CHF0.984, how many Canadian dollars would Ian have lost in these transactions? Assume the bank has a 1.00% commission on both the sale and the purchase of the funds. C Round to the nearest cent Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure
Suppose an investor invests in a savings account in England one year ago. At the time of investment, the investor converted $100,000 to pounds at an exchange rate of 1.404$/£. Assume the interest rate in England was 3% and today the investor is converting his/her savings balance (principal plus interest) to dollars when the exchange rate is 1.464$/£. How much money will the investor receive?
1. Emily found US$100 in his attic and sold it to a bank that charged him a commission of 0.60%. How much did he receive from the bank? Assume that the exchange rate was C$1 = US$0.77. 2. A bank in Toronto charges 3.25% commission to buy and sell currencies. Assume that the current exchange rate is US$1 = C$1.3533. a. How many Canadian dollars will you have to pay to purchase US$1,405? Round to the nearest cent b. How much commission in Canadian dollars (C$) will you pay the bank for the above transaction? 3. Skis are listed by a manufacturer for $850, less trade discounts of 30% and 18%. What further rate of discount should be given to bring the net price to $443?
An investor in the United States bought a one-year Brazilian security valued at 250,000 Brazilian reals (R$). The U.S. dollar equivalent was $200,000. The Brazilian security earned 20 percent during the year, but the Brazilian real depreciated 5 cents against the U.S. dollar during the time period ($0.80 to $0.75). After transferring the funds back to the United States, what was the investor's return on her $200,000? (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.) Investor's rate of return in U.S. terms %
Matthew purchased US$9,000 from a bank in America, which charged her a commission of 0.6%, and sold the US dollars to a bank in Canada, which charged her a 0.25% commission. How much money did she lose or gain? Assume that the exchange rate was C$1 = US$0.8996. Please don't use Excel format.
Wood, a U.S. corporation, owns Holz, a German corporation. Wood receives a dividend (non-Subpart F income) from Holz of 75,000€. The average exchange rate for the year is SIUS: 0.6€, and the exchange rate on the date of the dividend distribution is SIUS: 0.9€. Wood's exchange gain or loss is: A.$15,000 loss B.$15,000 gain C.$75,000 gain D. $0. There is no exchange gain or loss on a dividend distribution
Before boarding her flight to Zurich, Switzerland, Amber purchased CHF1,100 from her bank when the exchange rate was C$1 = CHF0.9733. However, Amber had to cancel the trip. Amber returned to the bank to convert the Swiss currency back into Canadian dollars. If the exchange rate changed to C$1 = CHF0.9883, how many Canadian dollars would Amber have lost in these transactions? Assume the bank has a 2.00% commission on both the sale and the purchase of the funds. C Round to the nearest cent
Cher has $10,000. The following quotations are available to her for US dollars ($), Convertible Marka (KM), and Swiss Francs (SF). She may either buy or sell at the stated rates: U.S. Bank:$2.13/SF Bosnia Bank:$4.87/KM Swiss Bank:SF2.38/KM What is Cher’s arbitrage profit assuming a triangle arbitrage is possible? (Round answer to nearest whole number.)
Ahmed is an Omani importer. He is expecting to receive a commodity from China within 30 days. The amount to be paid is CHY 1,000,000. What is the risk faced by Mr. Ahmed? OMR depreciates CHY depreciates OMR appreciates OMR/CHY is fixed
T Khan is a U.S.-based investor. Mr. Khan does not believe that the international Fisher effect (IFE) holds. Current one-year interest rates in Singapore are 12 percent, while one-year interest rates in the United States are 8 percent. Khan converts $800,000 to Singapore dollars and invests them in Singapore money market security. One year later, he converts the Singapore dollars back to U.S. dollars. The current spot rate of the Singapore dollar is $.7220. According to the IFE, what should the spot rate of the Singapore dollar in one-year be?

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS