I need help with Question 1 of the attached problem, please help me with how to do the question.

Capital Markets & Investments (Summer 2017) PROBLEM SET 12 Portfolio Choice VI: Applications of the CAPM This problem set will be graded. It should be submitted through Canvas no later than 9.00am 18 July. Late problem sets will not be accepted. The problem set should be done in groups of no more than four (MBA Assignment Type A). Please clearly write the names of all group members on the first page of your write-up. Only one group member need submit the problem set on behalf of the group. There are two questions to complete. Please show sufficient workings to justify your final answers and to allow the grader (me) to follow what you are doing. QUESTION 1 The spot U.S. dollar-euro exchange rate one year ago was 1 = $ 1.1055 and the current spot U.S. dollar-euro exchange rate is 1 = $ 1.1398 Source: New York Times, 10 Jul 2017 at http://markets.on.nytimes.com/research/markets/overview/overview.asp (a) Calculate the dollar denominated return on the Euro over the last year and give an example where this would be relevant. (b) Calculate the Euro denominated return on the dollar over the last year and give an example where this would be relevant. QUESTION 2 Consider the following data relating to a Canadian investment by a U.S. resident. No dividends were paid on the investment during the year ... End of year Value in CAD Spot Exchange Rate (USD 1 = .. ) 0 10,000 CAD 1.0870 1 12,000 CAD 1.3699 (a) Calculate the CAD denominated return on the asset. (b) Calculate the USD denominated return on the currency (c) Calculate the USD denominated return on the asset. (d) Should the U.S. investor be more interested in (a) or (c) ? Explain ? 2