Instruction 16.1:Use the information to answer the following question(s).
In September 2009 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 16.1. At an average price of €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

The investor initially invests $500,000 at a rate of $1.30/euro, which gives 500,000/1.30 = €384,615.38. 
At an average price of €60/share, the number of shares that can be purchased is €384,615.38/€60/share = 6,410 shares.