3. One year ago, an American investor bought 2000 shares of London Bridges at a price of 24 (or 24 UK pounds) per share when the exchange rate was $1.4/1 (or $1.40 dollars = 1 pound). The investor also invested 4,000,000 Japanese Yen in a money market fund in Japan last year when the exchange rate was 110 Yen = $ 1 US.

(a) Using current exchange rates, what is todays value of the investors portfolio in U.S. dollars if the UK investment decreased 10% (in local currency) and the Japan investment increased 1% (in local currency)?

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