Suppose a U

Finance Oct 16, 2020

Suppose a U.S. investor wishes to invest in a British firm currently selling for £50 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/£.

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 Exchange Rate Rate of return at Given Exchange Rate
(£) $1.80/£ $2.00/£ $2.20/£

£48

£53

£58

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