You invested $1000 in Sinoland Bank stock when Sinoland/US Dollar exchange rate was 10:1, and you received
Fantastic news! We've Found the answer you've been seeking!
Question:
You invested $1000 in Sinoland Bank stock when Sinoland/US Dollar exchange rate was 10:1, and you received exactly 200 local shares of the stock. The stock price rises 23% in local currency terms, and you have decided to enter a 3-month forward exchange rate hedge at 10.72 for the current local value of the investment. Assuming you liquidate the stock at the 23% increased price, and you sell your local currency proceeds at the 10.72 foreign exchange rate, what is the profit you should earn on the original investment? Assume no additional transaction costs.
A) $147.39
B) $100.39
C) $417.11
D) $230.00
Related Book For
Canadian Income Taxation Planning And Decision Making
ISBN: 9781259094330
17th Edition 2014-2015 Version
Authors: Joan Kitunen, William Buckwold
Posted Date: