Suppose you are a U.S.investor who is planning to invest $200,000 in China.Your Chinese investment gains 7.5 percent.If the exchange rate moves from 5.10 Yuan per dollar to 5.20 per dollar over the period,what is your total return on this investment?

Question

Quizplus · Accepted Answer

$200,000 × 5.10 Yuan = 1,020,000 Yuan
1,020,000 Yuan × 1.075 = 1,096,500 Yuan
1,096,500 / 5.20 = $210,865.38
($210,865.38 - 200,000) / 200,000 = 5.43%

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