What is the worth of this bank investment in us dollars

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Reference no: EM131506706

Question: In a certain foreign country in 2009, the local currency (the ‘Real') was pegged to the U.S. dollar at the rate of $1 U.S. = 1 Real. The Real was then devalued over the next five years so that $1 U.S. = 2 Real. A bank in the Northeastern United States bought assets in this country valued at 100 million Real in 2009. Now that it is year 2014, what is the worth of this bank's investment in U.S. dollars? Should the bank sell out of its investment in this foreign country or should it buy more assets?

Reference no: EM131506706

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