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A U.S. investor is considering a risk-free British bill with an annual rate of 7% (foreign rate). The current exchange rate is $1.22 per pound.

A U.S. investor is considering a risk-free British bill with an annual rate of 7% (foreign rate). The current exchange rate is $1.22 per pound.

a) What is the investors rate of return in dollars (domestic rate) if the dollar strengthens by 4 cents?

b) What is the investors rate of return in dollars (domestic rate) if the dollar weakens by 4 cents? use this formula please. I would like to see how you figured it out.

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