An investor in the US bought a one year New Zealand security valuing 195,000 New Zealand dollars. The US dollar equivalent was $100,000. The New Zealand security earn 16% during the year, but the New Zealand dollar depreciated 5 cents against the US dollar during the time period (.51/NZD to .46/NZD).
After transferring the funds back to the US, what was the investor's return on her $100,000? Determine the total ending value of the New Zealand investment in New Zealand dollars and then translate this value to US dollars. Then compute the return on the $100,000.© BrainMass Inc. brainmass.com June 3, 2020, 7:27 pm ad1c9bdddf
This solution provides calculations for total ending value and return on investment.