Suppose a U.S. investor wishes to invest in a British firm currently selling for £64 per...

Suppose a U.S. investor wishes to invest in a British firm currently selling for £64 per share. The investor has $12,800 to invest, and the current exchange rate is $2/£.

Suppose now the investor also sells forward £6,400 at a forward exchange rate of $1.90/£.

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

Price per Share (£)		Rate of Return (%) at Given Exchange Rate
Price per Share (£)	Exchange Rate:	$1.80/£		$2.00/£		$2.20/£
£60			%		%		%
£65			%		%		%
£70			%		%		%

Solutions

Expert Solution

Refer final table for the answer and following table for formulas.

ekkarill92 answered 1 year ago

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