Erin McQueen purchased 50 shares of BMW, a German stock traded on the Frankfurt Exchange, for 64.5 euros (€) per share exactly 1 year ago when the exchange rate was 0.67 €/US$. Today the stock is trading at 71.8 (€) per share, and the exchange rate is 0.75 €/US$.
a. Did the depreciate or appreciate relative to the US$ during the past year? Explain.
b. How much in US$ did Erin pay for her 50 shares of BMW when she purchased them a year ago?
c. For how much in US$ can Erin sell her BMW shares today?
d. Ignoring brokerage fees and taxes, how much profit (or loss) in US$ will Erin realize on her BMW stock if she sells it today?

  • CreatedApril 28, 2015
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