Exchange Rate Risk. An American investor buys 100 shares of London Enterprises at a price of 50
Question:
Exchange Rate Risk. An American investor buys 100 shares of London Enterprises at a price of £50 when the exchange rate is $1.60/£. A year later the shares are selling at £52. No dividends have been paid.
a. What is the rate of return to an American investor if the exchange rate is still $1.60/£?
b. What if the exchange rate is $1.70/£?
c. What if the exchange rate is $1.50/£?
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Related Book For 
Study Guide To Accompany Fundamentals Of Corporate Finance
ISBN: 9780073012421
5th Edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus
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