Suppose a U.S. investor wishes to invest in a British firm currently selling for £40 per share. The investor has $10,000 to invest, and the current exchange rate is $2/£. a. How many shares can the investor purchase? Number of shares    =       b. Fill in the table below for rates of return after one year in each of the nine scenarios (three possible prices per share in pounds times three possible exchange rates). (Leave no cells blank - be certain to enter "0" wherever required. Negative values should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places.)   Price per Share (£) Pound-Denominated Return (%) Dollar-Denominated Return (%) for Year-End Exchange Rate     $1.80/£ $2/£ $2.20/£ £35   % % %   %   %   % £40   % % %   %   %   % £45   %

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter22: International Financial Management
Section: Chapter Questions
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Suppose a U.S. investor wishes to invest in a British firm currently selling for £40 per share. The investor has $10,000 to invest, and the current exchange rate is $2/£.

a. How many shares can the investor purchase? Number of shares    =    

 
b. Fill in the table below for rates of return after one year in each of the nine scenarios (three possible prices per share in pounds times three possible exchange rates). (Leave no cells blank - be certain to enter "0" wherever required. Negative values should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places.)

 

Price per

Share (£)


Pound-Denominated

Return (%)

Dollar-Denominated Return (%)
for Year-End Exchange Rate
    $1.80/£ $2/£ $2.20/£
£35   % % %   %   %   %
£40   % % %   %   %   %
£45   % % %   %   %   %
 
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