Question

You are a U.S. investor who purchased British securities for 2,340 pounds one year ago when the British pound cost $1.52. No dividends were paid on the British securities in the past year. Your total return based on U.S. dollars was __________ if the value of the securities is now 2,440 pounds and the pound is worth $1.61.
a. 16.7%.
b. 20.0%.
c. 12.5%.
d. n/a.

Answer 1

Answer:

d. n/a

Explanation:

Calculation for Your total return based on U.S. dollars

Total return=(2,440 pounds*$1.61)- (2,340 pounds*$1.52)/ (2,340 pounds*$1.52)

Total return=$3,928.4-$3,556.8/$3,556.8

Total return=$371.60/$3,556.8

Total return=0.1045*100

Total return=10.45%

Therefore Your total return based on U.S. dollars was 10.45%