One year ago

Mr. Jones, an American citizen, purchased a property in UK for investment purpose. The price of the property was GBP450,000. He paid for the property by buying GBP450,000 and selling USD at the exchange rate of USD1.3862 per GBP.

Today

He sells the property and receives GBP500,000. The exchange rate is at USD1.3332 per GBP today. He sells the GBP500,000 sales proceeds into USD.

A) Has USD appreciated or depreciated in the past year, and by how many percent?

B) Has GBP appreciated or depreciated in the past year, and by how many percent?

C)Calculate the holding period return on the property in terms of USD.

Use the following information for parts D and E.

Exchange Rate of	Bid	Ask
USD per EUR	1.1832	1.1858
JPY per USD	104.63	104.84

D) Calculate the bid-ask spread of EUR per USD in pips.

E) Mr. Chan would like to sell JPY100,000,000. Calculate the amount of USD he will get.