* One year ago, a German investor converted eurosto dollar and purchased 100 shares of IBM stock in a New York Stock Exchange at a price f o r share. At the time of purchase, the exchange rate was $ 1 0.80 Euro. Today, IBM stock is selline at a price of $38 per share, and exchange rate is 0.75 Buro. The stock payed a dividend of $2 per share. If the investor were to sell the stock to ily and convert the proceeds back to cure, what would be his realized return on his initial euro in- vestment from holding IBM stock? 25. An American firm buys German cars for 300,000 to be paid after 1 year. The current exchange rate is $1.00 = 0.80. The importer hedges its exchange rate risk by buying a call option on 250,000 with the strike exchange rate of $1.00 =0.80. The call option expiring in 1 year and cost the firm $2,000. What is the dollar amount the American firm will net on this transaction if the spot exchange rate after 1 year is $1.00 = 0.85