Question: Erin McQueen purchased 50 shares of BMW, a German stock traded on the Frankfurt Exchange, for €64.5 (euros) per share exactly one year ago when the exchange rate was €0.67 > US$1. Today the stock is trading at €71.8 per share, and the exchange rate is €0.75/US$1.
a. Did the € depreciate or appreciate relative to the US$ during the past year? Explain.
b. How much in US$ did Erin pay for her 50 shares of BMW when she purchased them a year ago?
c. For how much in US$ can Erin sell her BMW shares today?
d. Ignoring brokerage fees and taxes, how much profit (or loss) in US$ will Erin realize on her BMW stock if she sells it today?