Question: Please show your work using the formula! 1. A stock in India rises 20% in local terms. The Indian rupee rises 25% against the U.K.

Please show your work using the formula!

1. A stock in India rises 20% in local terms. The Indian rupee rises 25% against the U.K. pound sterling. What is the return in pound sterling?

2. What is the variance on the Indian (Rp = rupee) stock market to a Canadian investor if Var(rRp) = 0.105, Var(sC$/Rp) = 0.088, and the local Indian stock market is independent of the value of the rupee?

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