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Suppose the spot Yuan/dollar exchange rate is 6.79. Sue,

/in /by

. Suppose the spot Yuan/dollar exchange rate is 6.79. Sue, a Chinese
national, has 10,000 Yuan that she wants to invest in a U.S. asset that promises an annual interest of 7 percent. If the expected exchange rate (Yuan/dollar) after a year is 7.2, how much will Sue earn in Yuan? You should include both the interest received and the gain or loss from exchange rate changes in answering this question.

-11,346.12 Yuan
-10,603.8 Yuan
-10,309.25 Yuan
-18,026.5 Yuan
-17,525.76 Yuan

2. Suppose the euro/Australian dollar exchange rate increases from 0.65 to 0.70 within a short period. Meanwhile, the Mexican peso/euro exchange rate rises from 15.71 to 16.27 during the same period. Identify the correct statement from the following.

-The euro has appreciated against both the Australian dollar as well as the peso.
-The euro has depreciated against both the Australian dollar as well as the peso.
-The euro has depreciated against the peso and appreciated against the Australian dollar.
-The euro has appreciated against the peso and depreciated against the Australian dollar.

 
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