Essay
Calculate the euro-based return an Italian investor would have realized by investing €10,000 into a $50 American stock on margin with only 40 percent down and 60 percent borrowed.The stock pays a $0.30 quarterly dividend,and after one year the investment sells for $54 the exchange has changed from €0.625 per dollar to €0.6875 per dollar.The interest on the margin loan is 1 percent per year.The margin loan is denominated in dollars.
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Our investor's initial endowment is $16,...View Answer
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