1. One year ago, an American investor bought 4000 shares of LBR in London at a price of 74 (or 74 UK pounds) per sharewhen the exchange rate was $1.25/1 (or $1.25 dollars = 1 pound). The investor also invested 50,000,000 Japanese Yen in a money market fund in Japan last year when the exchange rate was 105 Yen = $ 1 US. Over the last year, the value of LBR decreased by 15% and the Japanese money market fund increased by 2%

(a) Using current exchange rates, show the investors overallreturn on the LBR investment, and the return separated into the return on investment and return on exchange rate.

(b) Using current exchange rates, show the investors overallreturn on the Japanese Yen money market fund, and the return separated into the return on investment and return on exchange rate.

(c) What is the overall rate of return on the portfolio over the last year?