An American Investor Buys 100 Shares of London Enterprises at a Price

question 72

Essay

An American investor buys 100 shares of London Enterprises at a price of £50 when the exchange rate is $1.60/£. A year later the shares are selling at £52. No dividends have been paid.
a. What is the rate of return to the American investor if the exchange rate is still $1.60/£?
b. What if the exchange rate is $1.70/£?
c. What if the exchange rate is $1.50/£?

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Definitions:

Deviations From Standards

Deviations from standards refer to instances where performance or output fails to meet established benchmarks or expectations.

Transactional Leaders

Leaders who focus on the exchange process between themselves and their followers, emphasizing task completion and performance rewards.

Genuine Desire

A sincere and authentic longing or aspiration without any ulterior motives or pretenses.

Hardwork

The application of effort, endurance, and diligence in the pursuit of a goal or task.