Buy the bond the exchange rate

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Reference no: EM13735306

Suppose that you buy, and one year later sell, a foreign (British) bond under the following circumstances

When you buy the bond the exchange rate is $1.75 = Euro 1

you pay 45 Euros ($78.75) for the British bond

you sell the bond for 50 Euros, No interest payment was expected or received

when you sell the bond, the exchange rate is $1.45=1 euro

What is your gain or loss in dollars $_______

Reference no: EM13735306

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