Canadian investor buys 200 shares of Microsoft for $12,200 ($61.00 per share). Over the course of a year, Microsoft shares decline by $3.00.
a. If there is a 4 percent gain in the value of the U.S. dollar versus the Canadian dollar, what will be the total percentage return to the Canadian investor?
b. Now assume the stock declines by $6.00, but the U.S. dollar decreases by 2 percent versus the Canadian dollar. What will be the total percentage return to the Canadian investor?