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Calculate the euro-based return an Italian investor would have realized by investing 10,000 into a $50 American stock using 50 percent margin. One year after
Calculate the euro-based return an Italian investor would have realized by investing 10,000 into a $50 American stock using 50 percent margin. One year after investment, the stock pays a $1 dividend and sells for $54. The exchange rate has changed from 0.625 per dollar to 0.6875 per dollar. The interest on the margin loan is 1 percent per year. The margin loan was denominated in dollars.
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