An investor in the United States bought a one-year Brazilian security valued at 195,000 Brazilian mats. 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 $100,000"? Determine the total ending value at the Brant‘an investment in Brazilian reals and then translate this Brazilian value to US dollars. Afterward, compute the return on the $100,000 investment.

Answer rating: 100% (QA)

Amount invested in brazilian real 195000 Return on investment in brazilian real 19... View the full answer