Question
Suppose that you invested USD $100,000 in Mexican equity securities when spot rate was MXN19/USD at an average price of MXN 200/share. Also, assume that
Suppose that you invested USD $100,000 in Mexican equity securities when spot rate was MXN19/USD at an average price of MXN 200/share. Also, assume that the spot rate is 18 and you sold your securities at the average price per share of MXN235/share and converted your money back to USD. What is your profit/loss when you converted your MXN back to USD? Go step by step - How many MXN you have at the beginning-How many shares can you buy with your MXN at the initial price - Sell your shares at the rate you are given - find your total MXN - convert your MXN back to USD - find out your profit/loss
A. USD $24,028 profit
B. USD $24,028 loss
C. USD11,625 profit
D. USD11,625 loss
E. None of the above is correct
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