The Euro return (capital gains and dividend yield) on XXX share was 15% between 1st Jan 2016 and 31st Dec 2016. The dollar return on XXX share was 20.58% over the same period. The dollar/Euro exchange rate was 1.3 on 1st Jan 2016. The annual dividend yield for XXX share was 7% on 2nd Jan 2016.

a) On 31st Dec 2016, what exchange rate would you expect? What would have most likely happened to the Dollar over the one-year period (1st Jan 2016 31st Dec 2016)? Explain your calculation )

(b) Ignore part (a). If the share price for XXX was Euro100 on 1st Jan 2016, what would the XXX share price most likely to be on 31st Dec 2016?