You Invest $20,000 in France When the Exchange Rate Is

question 16

Multiple Choice

You invest $20,000 in France when the exchange rate is $1.22/€. Your investment gains 10%, and you subsequently exchange the euros back into dollars at a rate of $1.36/€. What is your total percentage return on this investment?

• A)−22.62%
• B)−1.32%
• C)1.32%
• D)22.62%
• E)24.39%

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Definitions:

Goodwill Method

An accounting method used to determine the value of a non-tangible asset acquired when one company buys another.

Profits and Losses

Financial terms representing the positive or negative financial outcomes resulting from a company's operations and activities.

LLP

Limited Liability Partnership, a partnership where some or all partners have limited liabilities, protecting individual partners from the debts of the partnership.

Net Income

The amount of profit that remains after subtracting all the costs, taxes, and expenses from total revenue.