Q3. (a) A stock denominated in Pesos has a price of 42.5 Pesos at the beginning and closes at 50.8 Pesos. The exchange rate at the beginning is 0.11 Pesos/Dollar and closes at 0.09 Peso/Dollar. Calculate the currency adjusted Return (RR) and the return in US Dollars if the dividend paid out is 2.5 Pesos. Also calculate the percent change in value of the peso. (3 marks) (b) With the help of a simple supply and demand graph, explain how an inflation increase in US can increase the demand for the British Pound, which will cause the supply of the British Pound to go down. What happens when the opposite scenario occurs? (4 marks) Q3. (a) A stock denominated in Pesos has a price of 42.5 Pesos at the beginning and closes at 50.8 Pesos. The exchange rate at the beginning is 0.11 Pesos/Dollar and closes at 0.09 Peso/Dollar. Calculate the currency adjusted Return (RR) and the return in US Dollars if the dividend paid out is 2.5 Pesos. Also calculate the percent change in value of the peso. (3 marks) (b) With the help of a simple supply and demand graph, explain how an inflation increase in US can increase the demand for the British Pound, which will cause the supply of the British Pound to go down. What happens when the opposite scenario occurs? (4 marks)