Required: Suppose you are a euro - based investor who just sold Microsoft shares that you had bought six months ago. You had invested 10,000 euros to buy Microsoft shares for $120 per share; the exchange rate was $1.09 per euro. You sold the stock for $153 per share and converted the dollar proceeds into euro at the exchange rate of $1.00 per euro. First, determine the profit from this investment in euro terms. Second, compute the rate of return on your investment in euro terms. How much of the return is due to the exchange rate movement? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal places.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Required: Suppose you are a euro - based investor who just sold Microsoft shares that you
had bought six months ago. You had invested 10,000 euros to buy Microsoft shares for $120
per share; the exchange rate was $1.09 per euro. You sold the stock for $153 per share and
converted the dollar proceeds into euro at the exchange rate of $1.00 per euro. First,
determine the profit from this investment in euro terms. Second, compute the rate of return
on your investment in euro terms. How much of the return is due to the exchange rate
movement? Note: Do not round intermediate calculations. Enter your answer as a percent
rounded to 1 decimal places.
Transcribed Image Text:Required: Suppose you are a euro - based investor who just sold Microsoft shares that you had bought six months ago. You had invested 10,000 euros to buy Microsoft shares for $120 per share; the exchange rate was $1.09 per euro. You sold the stock for $153 per share and converted the dollar proceeds into euro at the exchange rate of $1.00 per euro. First, determine the profit from this investment in euro terms. Second, compute the rate of return on your investment in euro terms. How much of the return is due to the exchange rate movement? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal places.
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