ppose you start with buying a stock in £ (equivalent to $100) when the e te is £1 = $1.5. One year later, the stock price changes to £75, and you s e time of the sale, the exchange rate is £1 = $1.6. What is your total pero turn? What percentage of your return is due to the exchange rate? Total return = 12.50%; Exchange rate return = 6.67%. Total return = 20%; Exchange rate return = 7.50%. Total return = 20%; Exchange rate return = 0.0%. Total return = 12.50%; Exchange rate return = 7.50%. Total roturn-00% Exchange rato return - 7 50%
ppose you start with buying a stock in £ (equivalent to $100) when the e te is £1 = $1.5. One year later, the stock price changes to £75, and you s e time of the sale, the exchange rate is £1 = $1.6. What is your total pero turn? What percentage of your return is due to the exchange rate? Total return = 12.50%; Exchange rate return = 6.67%. Total return = 20%; Exchange rate return = 7.50%. Total return = 20%; Exchange rate return = 0.0%. Total return = 12.50%; Exchange rate return = 7.50%. Total roturn-00% Exchange rato return - 7 50%
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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Transcribed Image Text:Suppose you start with buying a stock in £ (equivalent to $100) when the exchange
rate is £1 = $1.5. One year later, the stock price changes to £75, and you sell it. At
the time of the sale, the exchange rate is £1 = $1.6. What is your total percentage
return? What percentage of your return is due to the exchange rate?
Total return = 12.50%; Exchange rate return = 6.67%.
Total return = 20%; Exchange rate return = 7.50%.
Total return = 20%; Exchange rate return = 0.0%.
Total return = 12.50%; Exchange rate return = 7.50%.
Total return = 0.0%; Exchange rate return = 7.50%.
Total return = 20%; Exchange rate return = 6.67%.
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