Foreign exchange investment involves risks and at the same time returns. Considering you will invest your peso @ P50 = $1 foreign exchange with a fixed interest of 5%, when can you say that you are fully maximized the value of your investment upon maturity? a. Interest and proceeds received in full deposit to a bank account b. Interest received in full with current exchange rate @ P52 = $1 but retained the money in USD while waiting for another investment. c. Interest received in full with current exchange rate @ 52 = $1 and converted the full proceeds to peso d. Interest received in full with current exchange rate @ 52 = $1 but converted the interest only while waiting for another investment.
Foreign exchange investment involves risks and at the same time returns. Considering you will invest your peso @ P50 = $1 foreign exchange with a fixed interest of 5%, when can you say that you are fully maximized the value of your investment upon maturity? a. Interest and proceeds received in full deposit to a bank account b. Interest received in full with current exchange rate @ P52 = $1 but retained the money in USD while waiting for another investment. c. Interest received in full with current exchange rate @ 52 = $1 and converted the full proceeds to peso d. Interest received in full with current exchange rate @ 52 = $1 but converted the interest only while waiting for another investment.
Chapter9: Forecasting Exchange Rates
Section: Chapter Questions
Problem 28QA
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Foreign exchange investment involves risks and at the same time returns. Considering you will invest your peso @ P50 = $1 foreign exchange with a fixed interest of 5%, when can you say that you are fully maximized the value of your investment upon maturity?
a. Interest and proceeds received in full deposit to a bank account
b. Interest received in full with current exchange rate @ P52 = $1 but retained the money in USD while waiting for another investment.
c. Interest received in full with current exchange rate @ 52 = $1 and converted the full proceeds to peso
d. Interest received in full with current exchange rate @ 52 = $1 but converted the interest only while waiting for another investment.
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