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4. Suppose the spot Yuan/dollar exchange rate is 6.79. Sue, a Chinese national, has 10,000 Yuan that she wants to invest in a U.S. asset
4. Suppose the spot Yuan/dollar exchange rate is 6.79. Sue, a Chinese national, has 10,000 Yuan that she wants to invest in a U.S. asset that promises an annual interest of 7 percent. If the expected exchange rate (Yuan/dollar) after a year is 7.2, how much will Sue earn in Yuan? You should include both the interest received and the gain or loss from exchange rate changes in answering this question.
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