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In may 1995 when the exchange rate was 80 yen per dollar, japan life insurance company invested ¥800,000,000 (i.e., $10,000,000) in pure-discount u.s. bonds. the investment was liquidated one year later when the exchange rate was 110 yen per dollar. if the rate of return earned on this investment was 46% in termsof yen, calculate the dollar amount that the bonds were sold at.

Respuesta :

if the return is 46 %, the whole dollar amount after sale would be 14,600,000.

The dollar amount at which the bonds bought by the Japan life insurance is $10,618,181.82.

What is the dollar amount the bonds were sold at?

Exchange rate is the rate at which one currency is exchanged for another currency.

The first step is to determine the rate of return on the investment in terms of yen.

Total return = (1 + rate of return) x amount invested

= ¥800,000,000 x 1.46 = 1,168,000,000

The second step is to convert yen to dollar by dividing the total retrun at the current exchange rate.

1,168,000,000 / 110 = $10,618,181.82.

To learn more about exchange rate, please check: https://brainly.com/question/25780725

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