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

question 95

Essay

Calculate the euro-based return an Italian investor would have realized by investing €10,000 into a £50 British stock.The stock pays a £0.30 quarterly dividend,and after one year the investment sells for £54.
Spot exchange rates at the start and end of the year are shown in the table. $$\begin{array} { | l | l | l | } \hline & \mathrm { T } = 0 & \mathrm {~T} = 1 \\\hline \text { euro } & \$ 1.60 & \$ 1.60 \\\hline \text { pound } & \$ 2.00 & \$ 2.08 \\\hline\end{array}$$

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Definitions:

Fur Trappers

Individuals who catch and kill animals primarily for their fur, historically significant in the North American fur trade.

European Descent

Refers to individuals whose ancestry can be traced back to the continent of Europe.

Economic Independence

The state of having sufficient personal wealth to live, without having to depend on income from some form of employment.

U.S. Army Corps

Refers to the U.S. Army Corps of Engineers, a federal agency under the Department of Defense that provides public engineering services in support of national security, emergency response, and infrastructure development.