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

question 63

Essay

Calculate the euro-based return an Italian investor would have realized by investing €10,000 into a £50 British stock.One year after investment,the stock pays a £1 dividend,and sells for £54 the exchange rate has changed from €1.25 per pound to €1.30 per pound.


Definitions:

Capturing

The act of taking control of or obtaining something through force or strategy.

Drive-Reduction

A motivational theory suggesting that behavior is an attempt to reduce drives caused by needs or stress, restoring a state of balance.

Instinct

A natural and usually unchangeable behavior pattern in animals triggered by specific signals.

Cognitive

Relating to, being, or involving conscious intellectual activity such as thinking, reasoning, or remembering.

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