The investor used 850 million VND to buy LKL shares on the New York SCK at...
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The investor used 850 million VND to buy LKL shares on the New York SCK at the price of 90 USD/share on March 1, year N (this is the amount used only to buy shares, not including transaction costs). On this day, the bank listed the spot exchange rate: USD/VND = 22 802/22 903 After 1 year, on March 1, year N+1, the market price of the stock is 102 USD/share. On this day, the bank lists the spot exchange rate: USD/VND 21 708/21 807 On the trading floor, for each buy and sell order, the buyer and seller pay transaction fees Regulations on transaction fees are as follows: Transaction fee = Fee rate x Transaction value The transaction fee rate is shown in the following table Rate of charge Transaction value (USD) 2% =<10 000 1.6% 10 000 30 000 1.2% 30 000-50 000 0.9% > 50 000 I Request: a/ Determine the maximum number of shares an investor can buy and the amount of VND needed to pay the fee b/ Determine the profit investors earn after 1 year and the profit rate if Determined in USD c/ Determine the profit investors earn after 1 year and the profit rate if Determined in VND The investor used 850 million VND to buy LKL shares on the New York SCK at the price of 90 USD/share on March 1, year N (this is the amount used only to buy shares, not including transaction costs). On this day, the bank listed the spot exchange rate: USD/VND = 22 802/22 903 After 1 year, on March 1, year N+1, the market price of the stock is 102 USD/share. On this day, the bank lists the spot exchange rate: USD/VND 21 708/21 807 On the trading floor, for each buy and sell order, the buyer and seller pay transaction fees Regulations on transaction fees are as follows: Transaction fee = Fee rate x Transaction value The transaction fee rate is shown in the following table Rate of charge Transaction value (USD) 2% =<10 000 1.6% 10 000 30 000 1.2% 30 000-50 000 0.9% > 50 000 I Request: a/ Determine the maximum number of shares an investor can buy and the amount of VND needed to pay the fee b/ Determine the profit investors earn after 1 year and the profit rate if Determined in USD c/ Determine the profit investors earn after 1 year and the profit rate if Determined in VND
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Answer rating: 100% (QA)
Part a To determine the maximum number of shares an investor can buywe need to divide the available investment amount 850 million VND by the share pri... View the full answer
Related Book For
Modern Advanced Accounting In Canada
ISBN: 9781259066481
7th Edition
Authors: Hilton Murray, Herauf Darrell
Posted Date:
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