Suppose You Start with $100 and Buy Stock for £50

question 16

Multiple Choice

Suppose you start with $100 and buy stock for £50 when the exchange rate is £1 = $2.One year later,the stock rises to £60.You are happy with your 20 percent return on the stock,but when you sell the stock and exchange your £60 for dollars,you only get $45 since the pound has fallen to £1 = $0.75.This loss of value is an example of

• A)exchange rate risk.
• B)political risk.
• C)market imperfections.
• D)weakness in the dollar.

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Definitions:

Rigid Strength

Rigid strength describes a type of durability or resilience that is inflexible and unyielding, often in a physical context.

Moratorium

A period of delay or suspension, often used in developmental psychology to describe a phase where adolescents explore various identities and roles.

Identity Achievement

A stage in adolescent development where individuals have explored various options and made firm commitments to their beliefs and choices.

Compliant Agent

An entity or individual that agrees with and follows specific instructions, rules, or regulations set by an authority.