Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Suppose you are a euro - based Italian investor, and you are investing 1 0 , 0 0 0 to buy shares of a British

Suppose you are a euro-based Italian investor, and you are investing 10,000 to buy shares of a British company at 50 per share. The exchange rate is 1,255 per pound. The stock pays 1 dividend one year later, and you sell your shares for 55. The exchange rate has change to 1,3 per pound at the time of your sale
a) Your pound rate of return on this investment is: 12%(calculated on my own)(correct)
b) The change in pound-euro exchange rate is: 3,59%(calculated on my own)(correct)
c) Your euro rate of return is: 16,02%(calculated on my own)(correct)
d) If you had agreed at the outset to sell 7968 forward at the rate of 1,32, your euro rate of return on this investment is ???
Chegg, you have answered this question for me before but all your calculations turned out to be wrong. So please calculate correctly and show your work for d)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Your Money The Missing Manual

Authors: J.D. Roth

1st Edition

0596809409, 978-0596809409

More Books

Students also viewed these Finance questions

Question

Standard time is a function of (a) Average (c) Normal AppendixLO1

Answered: 1 week ago

Question

What is Centrifugation?

Answered: 1 week ago

Question

To find integral of ?a 2 - x 2

Answered: 1 week ago

Question

To find integral of e 3x sin4x

Answered: 1 week ago

Question

To find the integral of 3x/(x - 1)(x - 2)(x - 3)

Answered: 1 week ago

Question

What are Fatty acids?

Answered: 1 week ago

Question

What aspects would it be impossible to capture?

Answered: 1 week ago

Question

Enhance your words with effective presentation aids

Answered: 1 week ago