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Calculate the dollar-denominated returns for each scenario.

Calculate the dollar-denominated returns for each scenario.

Essentials Of Investments
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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Suppose a U.S. investor wishes to invest in a British firm currently selling for £60 per share. The investor has $6,000 to invest, and the current exchange rate is $2/£.

Suppose now the investor also sells forward £3,000 at a forward exchange rate of $2.10/£.

Calculate the dollar-denominated returns for each scenario. (Round your answers to 2 decimal places. Negative amounts should be indicated by a minus sign.)

 

 

This table presents data for analyzing the Rate of Return (%) on an educational platform. It outlines how the rate of return varies at different exchange rates for different prices per share (£). The table consists of these components: 1. **Price per Share (£):** - £54 - £59 - £64 2. **Exchange Rate:** - $1.80/£ - $2.00/£ - $2.20/£ 3. **Rate of Return (%) at Given Exchange Rate:** - Each exchange rate column has space to calculate and fill in percentage returns related to each share price. This setup can be used to calculate and demonstrate how varying exchange rates influence investment returns, an important concept in finance and economics studies.
Transcribed Image Text:This table presents data for analyzing the Rate of Return (%) on an educational platform. It outlines how the rate of return varies at different exchange rates for different prices per share (£). The table consists of these components: 1. **Price per Share (£):** - £54 - £59 - £64 2. **Exchange Rate:** - $1.80/£ - $2.00/£ - $2.20/£ 3. **Rate of Return (%) at Given Exchange Rate:** - Each exchange rate column has space to calculate and fill in percentage returns related to each share price. This setup can be used to calculate and demonstrate how varying exchange rates influence investment returns, an important concept in finance and economics studies.
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