Calculate the euro-based return an Italian investor.

Would have realized by investing €10,000 into a $50 American stock. One year after investment, the stock has no value since the firm is bankrupt. Meanwhile the exchange rate has changed from €0.625 per dollar to €0.6875 per dollar, and he sold $16,000 forward at the forward rate of €0.65 per dollar.

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To calculate the eurobased return for an Italian investor we need to consider the initial investment ... View the full answer