Answer: 7.58%
Explanation:
Given Data
Invested capital = $100,000
Stock price during purchase = £50
Exchange rate = $.50/$1.00
Selling rate after 1 year = £45
Exchange rate = $.60/$1.00
HPR = gain / pain * 100
= $50,000 * $1.00/$.55 + $10,000 * $1.00/ $.60 - $100,000 / $100,000 * 100%
= $50,000 * $1.812 + $10,000 * $1.667 - $100,000 / $100,00 * 100%
= $90,909.09 + $16666.67 - $100,000 / $100,000 * 100
= $7575.76 / $100,000 *100%
= 0.0757576 * 100%
= 7.58%
