Mr. James K. Silber, an avid international investor, just sold a share of Néstle, a Swiss firm, for SF5,250. The share was bought for SF4,680 a year ago. The exchange rate is SF2.00 per U.S. dollar now and was SF1.94 per dollar a year ago. Mr. Silber received SF136 as a cash dividend immediately before the share was sold. Suppose that Mr. Silber sold SF4,680, his principal investment amount, forward at the forward exchange rate of SF2.02 per dollar. How would this affect the dollar rate of return on this Swiss stock investment?
Mr. James K. Silber, an avid international investor, just sold a share of Néstle, a Swiss firm, for SF5,250. The share was bought for SF4,680 a year ago. The exchange rate is SF2.00 per U.S. dollar now and was SF1.94 per dollar a year ago. Mr. Silber received SF136 as a cash dividend immediately before the share was sold. Suppose that Mr. Silber sold SF4,680, his principal investment amount, forward at the forward exchange rate of SF2.02 per dollar. How would this affect the dollar rate of return on this Swiss stock investment?
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter27: Multinational Financial Management
Section: Chapter Questions
Problem 9P
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Mr. James K. Silber, an avid international investor, just sold a share of Néstle, a Swiss firm, for SF5,250. The share was bought for SF4,680 a year ago. The exchange rate is SF2.00 per U.S. dollar now and was SF1.94 per dollar a year ago. Mr. Silber received SF136 as a cash dividend immediately before the share was sold. Suppose that Mr. Silber sold SF4,680, his principal investment amount, forward at the forward exchange rate of SF2.02 per dollar. How would this affect the dollar
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