Problem 21-5 Objective: Adjusting returns for exchange rates Student Name: Course Name: Student ID: Not necessary Course Number: Not necessary An investor in the United States bought a one-year Brazilian security valued at 195,000 Brazilian reals. The U.S. dollar equivalent was 100,000. The Brazilian security earned 16 percent during the year, but the Brazilian real depreciated 5 cents against the U.S. dollar during the time period ($0.5128 to $0.4628). After transferring the funds back to the United States, what was the investor's return on his $100,000? Determine the total ending value of the Brazilian investment in Brazilian reals and then translate this value to U.S. dollars. Then compute the return on the $100,000. Solution Problem 21-5 Instructions Enter formulas to meet the requirements of this problem. Information Initial security value 195,000 Brazilian Reals BRLUSD Start 0.5128 Initial security value $100,000 U.S. Dollars BRLUSD End 0.4628 Brazilian interest rate 16% % Change Brazilian security value after one year 226,200 U.S. dollar equivalent 104,690 Rate of return 5%