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You are a U.S. investor who purchased British securities for 1,900 pounds two years ago when the British pound cost $1.30. After one year the
You are a U.S. investor who purchased British securities for 1,900 pounds two years ago when the British pound cost $1.30. After one year the value of your investment was 2,800 and the pound was worth $1.80. After year one you invest $1800 in the British investment. Finally, after two year, your investment is worth 4,000 pounds and the pound trades for $1.75. What is the appropriate rate of return on your investment in U.S. dollars.
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