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

question 37

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 after converting the stock back into dollars?

• A)-1.35%
• B)5.0%
• C)-5.0%
• D)-7.24%

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Definitions:

Retrieval Cue

Stimuli or signals that can trigger the memory of a previous experience, making it easier to recall information.

Encoding Specificity Principle

The theory that memory is improved when information available at encoding is also present at retrieval.

Sensory Store

A very short-term form of memory that allows individuals to retain impressions of sensory information after the original stimuli have ended.

Retrieval Cue

A trigger or stimulus that aids the recall of information from memory.