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You Invest $50,000 in Germany When the Exchange Rate Is

question 12

Multiple Choice

You invest $50,000 in Germany when the exchange rate is $1.35/€. Your investment gains 13%, and you subsequently exchange the euros back into dollars at a rate of $1.40/€. What is your total percentage return on this investment?


Definitions:

Tax

A tax is a compulsory financial charge or some other type of levy imposed upon a taxpayer by a governmental organization in order to fund government spending and various public expenditures.

Price

The amount of money expected, required, or given in payment for something.

Equilibrium Price

The price at which the supply of an item matches its demand, resulting in market stability.

Market

A venue or mechanism through which buyers and sellers interact to trade goods, services, or financial instruments.

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