Microsoft Word - Final Exam FIN6644_Summer2016 Take-Home.docx

1. Emerald Energy is an oil exploration and production company that trades on the London stock market. Over the past year, the stock has enjoyed a 20 percent return in pound terms, but over the same period, the exchange rate has fallen from $2.00 = 1 to $1.80 = 1. Calculate the investors annual percentage rate of return in terms of the U.S. dollars.