Contemporary Engineering Economics 6th Edition by Chan Park

تمرين 12

Currently, you have $10,000 to invest over five years. The interest rate in the United States is 4% for invested dollars. The interest rate in Europe is 5% for invested dollars. The interest rate in Japan is 6% for invested yen. Assume that these interest rates are expected to remain unchanged over the next five years. The current and expected exchange rates are given in Table 1.
Which of the following options (if any) will maximize your wealth in U.S. dollars at the end of five years
(a) Investing in the United States.
(b) Investing in Europe.
(c) Investing in Japan.
Table 1