At the start of May, you purchased some shares in Apple (a US company) for $US 45.61, and hedged your position using forward contracts (hedging the purchase value of the shares). The exchange rate at the time of purchase was $US1 = $NZ 1.71, while the one month NZ interest rate was 7.10% and the one month US interest rate was 6.40% (both rates are per annum, with monthly compounding). At the end of May, the exchange rate was $US1 = $NZ 1.75, while the shares were worth $US 46.89. Apple paid no dividends during May. What was your ($NZ) holding period return over the month of May? 5.21% 2.81% 3.53% 2.93%
At the start of May, you purchased some shares in Apple (a US company) for $US 45.61, and hedged your position using forward contracts (hedging the purchase value of the shares). The exchange rate at the time of purchase was $US1 = $NZ 1.71, while the one month NZ interest rate was 7.10% and the one month US interest rate was 6.40% (both rates are per annum, with monthly compounding). At the end of May, the exchange rate was $US1 = $NZ 1.75, while the shares were worth $US 46.89. Apple paid no dividends during May. What was your ($NZ) holding period return over the month of May? 5.21% 2.81% 3.53% 2.93%
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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At the start of May, you purchased some shares in Apple (a US company) for $US 45.61, and hedged your position using forward contracts (hedging the purchase value of the shares). The exchange rate at the time of purchase was $US1 = $NZ 1.71, while the one month NZ interest rate was 7.10% and the one month US interest rate was 6.40% (both rates are per annum, with monthly compounding). At the end of May, the exchange rate was $US1 = $NZ 1.75, while the shares were worth $US 46.89. Apple paid no dividends during May. What was your ($NZ) holding period return over the month of May?
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5.21% |
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2.81% |
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3.53% |
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2.93% |
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