i) If a Canadian investor had purchased 1,000 shares of Pepsi in the week of Feb 23, 2020 at $84 US per share , how much money would she have made or lost in C$ terms if she sold the shares in the week of March 27, 2022 at $68 US per share, ignoring commissions and taxes?

ii) Of the total C$ gain or loss, how much was attributable to (a) the change in the value of Pepsi shares and (b) the change in the value of the Canadian Dollar? (Give your answer in C$ terms not % terms.)

Answer rating: 100% (QA)

To calculate the gain or loss in C terms we need to convert the US dollar amounts to Canadian dollars using the exchange rate at the time of each transaction i On Feb 23 2020 the exchange rate was approximately 1 USD 133 CAD Therefore the Canadian investor paid 84 USDshare x 133 CADUSD x 1000 shares 112080 CAD On March 27 2022 the exchange rate was approximately 1 USD 125 CAD Therefore the Canadian investor would have received 68 USDshare x 125 CADUSD x 1000 shares 85000 CAD The gain or loss in C terms is the difference between the amount paid and the amount received 85000 CAD 112080 CAD 27080 CAD Therefore the Canadian investor would have lost 27080 CAD ii a The change in the value of Pepsi shares is 68 USDshare 84 USDshare 16 USDshare To convert this to C terms we use the exchange rate at the time of sale 16 USDshare x 125 CADUSD x 1000 shares 20000 CAD Therefore the loss attributable to the change in the value of Pepsi shares is 20000 CAD b The change in the value of the Canadian dollar ... View the full answer