Calculate the Euro-Based Return an Italian Investor Would Have Realized

question 97

Essay

Calculate the euro-based return an Italian investor would have realized by investing €10,000 into a £50 British stock on margin with only 40% down and 60% borrowed.The stock pays a £0.30 quarterly dividend, and after one year the investment sells for £54 the exchange rate has changed from €1.25 per pound to €1.30 per pound. The interest on the margin loan is 1% per year. The margin loan is denominated in pounds.

---

Definitions:

Statistic

A numerical measurement describing some characteristic of a sample, used to estimate the value of a population parameter.

Standard Deviation

It quantifies the dispersion of a dataset by calculating the average distance of each data point from the mean.

Monthly Rent

Refers to the periodic payment made to a landlord or property owner for the use of a residence or commercial space.

One-Bedroom Apartments

Living spaces designed to include one bedroom along with other living areas such as a living room, kitchen, and bathroom.