Foreign Exchange Rates: Ecuadorian Sucre

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The Ecuadorian Sucre is trading for $0.000425 today and you are redeeming an Ecuadorian one-year bill that you purchased one year ago when the Sucre was at $0.0005. Calculate the U.S. dollar rate of return on this Ecuadorian one-year bill if you purchased it for 8,000,000 Sucre and will redeem it for 10,000,000 Sucre. What was the return to an Ecuadorian investor?

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The Ecuadorian Sucre is trading for $0.000425 today and you are redeeming an
Ecuadorian one-year bill that you purchased one year ago ...

Solution Summary

The solution calculates the U.S. dollar rate of return on the Ecuadorian one-year bill.

$2.49