Suppose a U.S. investor wishes to invest in a British firm currently selling for

Question

Suppose a U.S. investor wishes to invest in a British firm currently selling for £64 per share. The investor has $12,800 to invest, and the current exchange rate is $2/£. a. How many shares can the investor purchase?

Fill in the table below for rates of return after one year in each of the nine scenarios (three possible prices per share in pounds times three possible exchange rates). (Leave no cells blank - be certain to enter "0" wherever required. Round your answer to 2 decimal places. Negative amounts should be indicated by a minus sign. Omit the "%" signs in your response.)

Fill in the table below for rates of return after one year in each of the nine scenarios (three possible prices per share in pounds times three possible exchange rates). (Leave no cells blank - be certain to enter "0" wherever required. Round your answer to 2 decimal places. Negative amounts should be indicated by a minus sign. Omit the "%" signs in your response.)

Explanation / Answer

Answer:(a) Investment in £=$12800/$2=6400£

Shares purchases=£6400/£64 per share=100 share can purchase

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