Exchange rate and return to investor

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Reference no: EM1346050

An American investor buys 100 shares of London Enterprises at a price of £50 when the exchange rate is $1.60/£. A year later the shares are selling at £52. No dividends have been paid.

a. What is the rate of return to an American investor if the exchange rate is still $1.60/£?

b. What if the exchange rate is $1.70/£?

c. What if the exchange rate is $1.50/£?

Reference no: EM1346050

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