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21 January, 19:27

Calculate the dollar-based percentage return an American would have if he bought a British stock at ₤50 per share and sold it one year later at ₤60.

The spot exchange rate one year ago was $1.50 = ₤1 and the spot rate prevailing at the end of the year was $1.20 = ₤1.

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  1. 21 January, 19:46
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    16% returns

    Explanation:

    initial cost: e50

    sales price e60

    returns (e10).

    to ($)

    initial cost = $75 (1.5*e50)

    returnns = $12 (e10*1.2)

    percentage: $12 / $75 * 100

    = 16%
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