Instruction 17.1: Use the Information to Answer the Following Question(s)

question 38

Multiple Choice

Instruction 17.1:
Use the information to answer the following question(s) .
In September 2002 a U.S. investor chooses to invest $500,000 in German equity securities at a then current spot rate of $1.30/euro. At the end of one year the spot rate is $1.35/euro.
-Refer to Instruction 17.1.At the end of the year the investor sells his stock that now has an average price per share of euro 57.What is the investor's average rate of return before converting the stock back into dollars?

• A)5.0%
• B)-3.0%
• C)-5.0%
• D)3.0%

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Definitions:

Degrees Of Freedom

Represents the count of values in a calculation that are free to vary without infringing on preset constraints.

Test Statistic

A value calculated from sample data that is used in a hypothesis test to decide whether to reject the null hypothesis.

T Test

A statistical hypothesis test used to compare the means of two groups and determine if they come from the same population by analyzing the difference.

T Value

A value calculated in a t-test that assesses the difference between two means relative to the variation in the data.