An investor in the US bought UK securities. What is the Ending Value in British Pounds? In U.S. Dollars?
Response to the following:
An investor in the United States bought a one-year British security valued at 196,000 British pounds. The U.S. dollar equivalent was $98,000. The British security earned 17 percent during the year, but the British pound depreciated five cents against the U.S. dollar during the period ($0.50 to $0.45).
After transferring the funds back to the United States, what was the investor's return on her $98,000? Determine the total ending value of the British investment in British pounds and then translate this British value to U.S. dollars.