Erin McQueen purchased 80 shares of? BMW, a German stock traded on the Frankfurt? Exchange, for...

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Erin McQueen purchased 80 shares of? BMW, a German stock tradedon the Frankfurt? Exchange, for euro 65.4 ?(euros) per shareexactly one year? ago, when the exchange rate was 0.68 euro ?/US$.Today the stock is trading at euro 71.3 per? share, and theexchange rate is 0.75 euro ?/US$. ?(Enter all losses as negative?numbers.)
c. For how much in? US$ can Erin sell her BMW shares? today?
d. Ignoring brokerage fees and? taxes, how much profit? (or loss)in? US$ will Erin realize on her BMW stock if she sells it?today?

Answer & Explanation Solved by verified expert

3.8 Ratings (461 Votes)

c. Current price = 71.3 Euro.

Number of shares = 80

Price of Euro / dollar = 0.75

Hence Erin can sell BMW share at 71.3 * 80 * 0.75

= $4,278

d. Purchase price of Erin one year ago in US $

65.4 Euro * 80 shares = 5,232 Euros

Exchange rate = 0.68 / US$

= 5,232 * 0.68

= $3,558 (rounded)

If Erin sells the shares to day she will realize $4,278 as calculated above,

Therefore, profit will be Selling price - Purchase price = $4,278 - $3,558

Profit = $720

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Transcribed Image Text

Erin McQueen purchased 80 shares of? BMW, a German stock tradedon the Frankfurt? Exchange, for euro 65.4 ?(euros) per shareexactly one year? ago, when the exchange rate was 0.68 euro ?/US$.Today the stock is trading at euro 71.3 per? share, and theexchange rate is 0.75 euro ?/US$. ?(Enter all losses as negative?numbers.)c. For how much in? US$ can Erin sell her BMW shares? today?d. Ignoring brokerage fees and? taxes, how much profit? (or loss)in? US$ will Erin realize on her BMW stock if she sells it?today?