Question
As a US investor, you have decided to diversify your portfolio by including stocks of UK companies in your portfolio. You are considering investing in
As a US investor, you have decided to diversify your portfolio by including stocks of UK companies in your portfolio. You are considering investing in British Petroleum or UK Gas and Oil. British Petroleum’s ADRs are traded on the NYSE, while UK Gas and Oil is traded on the London Stock Exchange. BP is currently priced at $42.50. You expect to sell it next year for $47.00. UKGO is currently priced at £84.25. You expect to sell it next year at £94.00. The current exchange rate is $1.6250/£. You expect the exchange rate next year to be $1.5500/£.
Based on this, which investment should you choose? Why?
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Principles of Auditing and Other Assurance Services
Authors: Ray Whittington, Kurt Pany
19th edition
978-0077804770, 78025613, 77804775, 978-0078025617
