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Use the following information to answer questions 20-21. AU.K. investor invested Pounds 1 million in shares of a U.S. firm, Caterpillar, on January 1, 2004.
Use the following information to answer questions 20-21. AU.K. investor invested Pounds 1 million in shares of a U.S. firm, Caterpillar, on January 1, 2004. The price per Caterpillar share at that time was USD 75 and the exchange rate at that time was $2.0 per Pound. On January 1, 2005, the price per Caterpillar share was USD 50 and the exchange rate was $15 per Pound 20. What is the rate of return in Pound terms for the UK investor for this 1 year period? 21. What was the contribution of exchange rate movement to the rate of return in Pound terms
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