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Author Question: Assume a U.S. investor buys a Mexican bond with a face value of MXP 1,000 and a 20 percent annual ... (Read 119 times)

D2AR0N

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on: Jun 30, 2018
Assume a U.S. investor buys a Mexican bond with a face value of MXP 1,000 and a 20 percent annual interest yield while the exchange rate is MXP 10 per dollar. What is the dollar return from the bond if the exchange rate at the end of the year is MXP 11 per dollar?
 a. 9.1
  b. 10.0
  c. 18.2
  d. 20.0
  e. 32.0

Question 2

The exchange rate:
 a. states the price of one currency in terms of another currency.
 b. is the rate at which one country's money is flowing to a second country.
  c. is closely related to the concept of comparative advantage.
 d. is closely related to the concept of absolute advantage.


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kthug

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Reply #1 on: Jun 30, 2018
Answer to Question 1

a

Answer to Question 2

a


D2AR0N

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Reply 2 on: Jun 30, 2018
Excellent

Joy Chen

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Reply 3 on: Yesterday
Great answer, keep it coming :)

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