Suppose now the investor also sells forward £12,000 at a forward exchange rate of $1.90/€. Required: a. Calculate the dollar-denominated returns for each scenario. (Round your percentage answers to 2 decimal places Negative amounts should be indicated by a minus sign.) Price per Share (C) £ £ £ 32 37 42 Exchange Rate Rate of Return (%) at Given Exchange Rate $1.80/E $2.00/ $2.20/E % % % % % % % % %

Suppose now the investor also sells forward £12,000 at a forward exchange rate of $1.90/€. Required: a. Calculate the dollar-denominated returns for each scenario. (Round your percentage answers to 2 decimal places Negative amounts should be indicated by a minus sign.) Price per Share (C) £ £ £ 32 37 42 Exchange Rate Rate of Return (%) at Given Exchange Rate $1.80/E $2.00/ $2.20/E % % % % % % % % %

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 £40 per share. The investor has $20,000 to invest, and the current exchange rate is $2/£.Suppose now the investor also sells forward £10,000 at a forward exchange rate of $1.95/£. Required:a. Calculate the dollar-denominated returns for each scenario. (Round your percentage answers to 2 decimal places. Negative amounts should be indicated by a minus sign.)
Suppose a U.S. investor wishes to invest in a British firm currently selling for £40 per share. The investor has $12,000 to invest, and the current exchange rate is $2. Suppose now the investor also sells forward £6,000 at a forward exchange rate of $ 1.90 £ Required: a. Calculate the dollar - denominated returns for each scenario. (Round your percentage answers to 2 decimal places. Negative amounts should be indicated by a minus sign.) Suppose a U.S. investor wishes to invest in a British firm currently selling for £40 per share. The investor has $12,000 to invest, and the current exchange rate is $2/£. Suppose now the investor also sells forward £6,000 at a forward exchange rate of $1.90/£. Required: a. Calculate the dollar-denominated returns for each scenario. (Round you percentage answers to 2 decimal places. Negative amounts should be indicated by a minus sign.) Price per Share (£) £ 36 £ 41 £ 46 www Exchange Rate Rate of Return (%) at Given Exchange Rate $2.00/£ $1.80/£ % % % %…
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.)
Suppose a U.S. investor wishes to invest in a British firm currently selling for £34 per share. The investor has $6,800 to invest, and the current exchange rate is $2 per £. Suppose now the investor also sells forward £3, 400 at a forward exchange rate of $1.90 per £. Calculate the dollar - denominated returns for each scenario. Note: Round your answers to 2 decimal places. Negative values should be indicated by a minus sign.
Suppose a U.S. investor wishes to invest in a British firm currently selling for £33 per share. The investor has $66.000 to invest, and the current exchange rate is $2/£ Suppose now the investor also sells forward £33,000 at a forward exchange rate of $2.05/£. 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 (R) Exchange Rate: S K C 31 36 41 Rate of Return (%) at Given Exchange Rate $1,80/ $2.00/ $2.20/ 1% % % % % % %
Please show complete steps and correct. Suppose a U.S. investor wishes to invest in a British firm currently selling for £40 per share. The investor has $12,000 to invest, and the current exchange rate is $2/£. Suppose now the investor also sells forward £6,000 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.).
Suppose a U.S. investor wishes to invest in a British firm currently selling for £24 per share. The investor has $48,000 to invest, and the current exchange rate is $2/£.Suppose now the investor also sells forward £24,000 at a forward exchange rate of $1.90/£. Calculate the dollar-denominated returns for each scenario.
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/£. Consider three possible prices per share at £54, £59, and £64 after 1 year. Also, consider three possible exchange rates at $1.60/£, $2/£, and $2.40/£ after 1 year. Calculate the standard deviation of both the pound- and dollar-denominated rates of return if each of the nine outcomes (three possible prices per share in pounds times three possible exchange rates) is equally likely. (Do not round intermediate calculations. Round your percentage answers to 2 decimal places.)
Required: Suppose a U.S. investor wishes to invest in a British firm currently selling for £90 per share. The investor has $36,000 to invest, and the current exchange rate is $2/£. Consider three possible prices per share at £88, £93, and £98 after 1 year. Also, consider three possible exchange rates at $1.80/£, $2/£, and $2.20/£ after 1 year. Calculate the standard deviation of both the pound- and dollar-denominated rates of return if each of the nine outcomes (three possible prices per share in pounds times three possible exchange ates) is equally likely. (Do not round intermediate calculations. Round your percentage answers to 2 decimal places.) Standard deviation of pound-denominated return Standard deviation of dollar-denominated return %
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 % % % % % %
Suppose you are a U.S. investor who is planning to invest $805,000 in Mexico. Your Mexican investment gains 10.2 percent. If the exchange rate moves from 12.4 pesos per dollar to 12.7 pesos per dollar over the period, what is your total return on this investment? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Total return 4
Suppose a U.S. investor wishes to invest in a British firm currently selling for £30 per share. The investor has $6,000 to invest, and the current exchange rate is $2 per £. Consider three possible prices per share at £26, £31, and £36 after 1 year. Also, consider three possible exchange rates at $1.60 per £, $2 per £, and $2.40 per £ after 1 year. Calculate the standard deviation of both the pound- and dollar-denominated rates of return if each of the nine outcomes (three possible prices per share in pounds times three possible exchange rates) is equally likely. Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Standard deviation of pound-denominated return Standard deviation of dollar-denominated return 10.22 % 13.33 %

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