Instruction 17.1:
Use the information to answer the following question(s).
In September 2002 a U.S. investor chooses to invest $500,000 in German equity securities at a then current spot rate of $1.30/euro. At the end of one year the spot rate is $1.35/euro.
-Refer to Instruction 17.1.At an average price of euro 60/share,how many shares of stock will the investor be able to purchase?
A)8333 shares
B)6410 shares
C)6173 shares
D)10,833 shares

Question

Quizplus · Accepted Answer

To calculate the number of shares the investor can purchase, we need to convert the initial investment amount into euros:

$500,000 / $1.30/euro = €384,615.38

Next, we divide this amount by the average price per share of €60:

€384,615.38 / €60/share = 6410.26 shares

Since shares cannot be divided into fractions, the investor will be able to purchase only 6410 shares. Therefore, the best choice is B) 6410 shares.

Instruction 17.1: Use the Information to Answer the Following Question(s)