Calculate the real dollar rate of return on a 5,000 pound sterling deposit in a London bank
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Question:
Calculate the real dollar rate of return on a 5,000 pound sterling deposit in a London bank in a year when the interest rate on pounds is 8 percent, the dollar/pound exchange rate moves from $1.63 per pound to $1.44 per pound, and the dollar prices increase by 8 percent. What is the real rate of return will be in percent?
Related Book For
Corporate Finance A Focused Approach
ISBN: 978-1439078082
4th Edition
Authors: Michael C. Ehrhardt , Eugene F. Brigham
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