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In time 0, an American investor bought 80 shares of LBL at a price of 50 (or 50 UK pounds) when the exchange rate was
In time 0, an American investor bought 80 shares of LBL at a price of 50 (or 50 UK pounds) when the exchange rate was $1.70/1 (or $1.70 dollars = 1 pound). In time 1, the company paid a dividend of 1 and the stock was selling for 44 after the dividend. What is the rate of return to the investor if the exchange rate is $1.5/1 in time 1? Show your work.
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