Question: The following table shows current and future expected asset prices, measured in their domestic currencies, for both eurozone and Canadian assets (these can be considered

The following table shows current and future expected asset prices, measured in their domestic currencies, for both eurozone and Canadian assets (these can be considered total return indexes). The table also has the corresponding data for the CAD/EUR spot rate.

Eurozone

Canada

Today

Expected

Today

Expected

Asset price

100.69

101.50

101.00

99.80

CAD/EUR

1.2925

1.3100

What is the expected domestic-currency return for a eurozone investor holding the Canadian asset?

What is the expected domestic-currency return for a Canadian investor holding the eurozone asset?

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