Question: One year later the price levels SA has risen 5% while the price level in the USA has risen by 2%. The new exchange rate

One year later the price levels SA has risen 5% while the price level in the USA has risen by 2%. The new exchange rate is USD0,0565 per ZAR1. If the 1 year return on your investment in Microsoft Stock was 6%. How much of this would have been lost due to exposure to foreign currency risk. Support your answer with appropriate calculations and an explanation.

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