Compute his return on investment in dollar terms

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Reference no: EM131924530

A U.S. investor sold British stocks he bought one year ago. He had invested $5,475 to buy the shares for £30 per share and sold the shares for £37.50 per share. The exchange rate was $/£ = 1.8250 at the beginning and $/£ = 1.6005 at the end of the period.

i. Compute his return on investment in pound terms

ii. Compute his return on investment in dollar terms

iii. How much of the return was due to changes in exchange rates? (answer = -12.30%)

I put the answers to each question, please help me understand how to get them.

Reference no: EM131924530

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