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

question 27

Essay

Calculate the euro-based return an Italian investor would have realized by investing €10,000 into a $50 American stock. One year after investment, the stock has no value since the firm is bankrupt. Meanwhile the exchange rate has changed from €.625 per dollar to €.6875 per dollar, and he sold $16,000 forward at the forward rate of €.65 per dollar.

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