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Dollar-Denominated Return for Year-End Exchange Rate 1.9 SF/S 2 SF/S 2.3 SF/S Price per Share (SF) Swiss Franc-Denominated Return (%) 20 SF 30 SFL |
Dollar-Denominated Return for Year-End Exchange Rate 1.9 SF/S 2 SF/S 2.3 SF/S Price per Share (SF) Swiss Franc-Denominated Return (%) 20 SF 30 SFL | 40 SF Suppose a US investor wishes to invest in a German firm currently selling for 30 SF per share. The investor has $12,000 to invest, and the current exchange rate is 2SF/$. a. How many shares can the investor purchase? (5 pts) b. Fill the table below for dollar-denominated rates of return after one year in each of the nine scenarios. (10 pts) C. Now, suppose that the investor also sells forward SF 60,000 at a forward exchange rate of 2.2 SF/$. Recalculate the dollar-denominated returns for each scenario. (20 pts) Dollar-Denominated Return for Year-End Exchange Rate 1.9 SF/S 2 SF/S 2.3 SF/S Price per Share (SF) Swiss Franc-Denominated Return (%) 20 SF 30 SFL | 40 SF Suppose a US investor wishes to invest in a German firm currently selling for 30 SF per share. The investor has $12,000 to invest, and the current exchange rate is 2SF/$. a. How many shares can the investor purchase? (5 pts) b. Fill the table below for dollar-denominated rates of return after one year in each of the nine scenarios. (10 pts) C. Now, suppose that the investor also sells forward SF 60,000 at a forward exchange rate of 2.2 SF/$. Recalculate the dollar-denominated returns for each scenario. (20 pts)
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