Instruction 16.1: Use the Information to Answer Following Question(s)

question 4

Multiple Choice

Instruction 16.1:
Use the information to answer 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 16.1. 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:

Small-batch Production

A manufacturing process that involves producing goods in small quantities, allowing for greater flexibility and customization.

Worker Skill

The expertise, abilities, and competencies that a worker possesses, which determine their capability to perform tasks efficiently and effectively.

Competitive Advantage

The attributes or conditions that allow a company to produce goods or services better or more cheaply than its competitors, leading to a favorable market position.

Transformation Process

The series of actions and operations that convert inputs into outputs, creating products or services in an organization.