Question
Ian McKenzie, an avid international investor, just sold a share of Nestle, a Swiss firm, for SFR 5,000.The share was bought for SFR 4,000 a
Ian McKenzie, an avid international investor, just sold a share of Nestle, a Swiss firm, for SFR 5,000.The share was bought for SFR 4,000 a year ago. The exchange rate is now SFR 1.50 / USD and was SFR 1.00 / USD a year ago.Mr. McKenzie received SFR 750 as a cash dividend immediately before the share was sold.Suppose when he made the investment, Mr. McKenzisold SFR 5,000 forward at the forward exchange rate of SFR 1.25 / USD.What is the amount of profit in USD on this investment?
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Finance Applications and Theory
Authors: Marcia Cornett
4th edition
1259691411, 978-1259691416
