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The Brazilian energy company Petrobras has an ADR with the symbol PBR. The price of an ordinary share on the Bovespa, the Brazil stock exchange,

The Brazilian energy company Petrobras has an ADR with the symbol PBR. The price of an ordinary share on the Bovespa, the Brazil stock exchange, trades at BRL14.52, and the price of the ADR is US$8.59. The current exchange rate is BRL3.38/$. One ADR buys two ordinary Petrobras common shares trading on the Brazilian stock exchange. Four months from today the local currency price is BRL13.50, and the exchange rate is BRL3.25/$.

a.) What is your rate of return measured in dollars?

b.) How much of your return is due to the change in the stock price and how much is due to the change in the currency?

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