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

question 39

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 interest on the margin loan is 1% per year.The margin loan is denominated in pounds.
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:

Central Nervous System

The part of the nervous system consisting of the brain and spinal cord, responsible for processing and sending out signals to the rest of the body.

Neurons

Specialized cells in the nervous system that transmit information to other nerve cells, muscle, or gland cells.

Cell Body

The part of a neuron that contains the nucleus and most of the cytoplasm and where the metabolic work of the cell is done.

Neuron

A nerve cell that is the basic building block of the nervous system, responsible for transmitting information throughout the body.