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

question 8

Essay

Calculate the euro-based return an Italian investor would have realized by investing €10,000 into a £50 British stock using 50% margin. 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. The interest on the margin loan is 1% per year. The margin loan was denominated in pounds.

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Definitions:

Profitable Clients

Clients that generate more revenue for a business than the costs associated with serving them.

Corporate Social Responsibility (CSR)

A business model where companies integrate social and environmental concerns in their operations and interactions with stakeholders, aiming to contribute positively to society.

Becoming Profitable

The process or stage where a business starts generating a financial gain or profit beyond its operational costs and expenses.

Microfinance

A source of financial services for entrepreneurs and small businesses lacking access to banking and entrepreneurial training.