2. Consider the following returns:

Note that the exchange rate is stated as beginning of period dollars for pounds. What is the average return in each market from the point of view of a US investor and of a UK investor? 2.2 Given the data in problem 1, what is the standard deviation of return from the point of view of a US investor and of a UK investor?

\begin{tabular}{|l|l|l|l|} \hline Period & United States & UnitedKingdom & Exchange Rate \\ \hline 1 & 10% & 5% & $3 \\ \hline 2 & 15% & 5% & 2.5 \\ \hline 3 & 5% & 15% & 2.5 \\ \hline 4 & 12% & 8% & 2 \\ \hline 5 & 6% & 10% & 1.5 \\ \hline 6 & & & 2.5 \\ \hline \end{tabular} \begin{tabular}{|l|l|l|l|} \hline Period & United States & UnitedKingdom & Exchange Rate \\ \hline 1 & 10% & 5% & $3 \\ \hline 2 & 15% & 5% & 2.5 \\ \hline 3 & 5% & 15% & 2.5 \\ \hline 4 & 12% & 8% & 2 \\ \hline 5 & 6% & 10% & 1.5 \\ \hline 6 & & & 2.5 \\ \hline \end{tabular}