A U.S. Investor wants to invest 1,000 USD (U.S. Dollar) in Hong Kong, where the interest rate is .5%. Today the exchange rate is 7.90 HK$/USD.
How many HK$ (Hong Kong Dollars) will the investor have in one year?
The investor exchanges HK$ for USD at 8.25 HK$/USD. How many USD does the investor have? What is the investors return?
Which currency appreciated? How much, in percent, did it depreciate?
Which currency depreciated? How much in percent did it depreciate?