Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A U.S. investor has $20,000. This is used to buy a stock in Sweden that costs 100 Swedish krona per share. At this time the

A U.S. investor has $20,000. This is used to buy a stock in Sweden that costs 100 Swedish krona per share. At this time the exchange rate is $0.11 = 1 Swedish krona.

One year later the stock can be sold for 105 Swedish krona per share. The investor sells the stock and converts the krona back to dollars. If the return to the U.S. investor (measured in dollars) was -14.1%, what was the exchange rate?

$7.447 = 1 Swedish krona

$0.06 = 1 Swedish krona

$0.12551 = 1 Swedish krona

$0.14 = 1 Swedish krona

$0.12 = 1 Swedish krona

$0.09 = 1 Swedish krona

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Derivative Investments An Introduction To Structured Products

Authors: Richard D. Bateson

1st Edition

1848167113, 9781848167117

More Books

Students also viewed these Finance questions

Question

=+1 Interpret the R2 of this regression model.

Answered: 1 week ago