Suppose a U.S. investor wishes to invest in a British firm currently selling for £40 per share. The investor has $10,000 to invest, and the current exchange rate is $2/£.

a. How many shares can the investor purchase?

b. Fill in the table below for rates of return after one year in each of the nine scenarios (three possible share prices denominated in pounds times three possible exchange rates).

c. When is the dollar-denominated return equal to the pound-denominated return?? L042