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Emerald Energy Is an Oil Exploration and Production Company That

question 74

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Emerald Energy is an oil exploration and production company that trades on the London stock market.Assume that when purchased by an international investor the stock's price and the exchange rate were £5 and £0.64/$1.00 respectively.At selling time,one year after purchase,they were £6 and £0.60/$1.00.If the investor had sold £5,the principal investment amount at the same time that the stock was purchased,forward at the forward exchange rate of £0.60/$1.00,the dollar rate of return would be:


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