1. Suppose you are a euro-based investor who just sold Micr

1. Suppose you are a euro-based investor who just sold Microsoft… 1. Suppose you are a euro-based investor who just sold Microsoft shares that you had bought six months ago. You had invested 10,000 euros to buy Microsoft shares for $120 per share; the exchange rate was $0.99 per euro. You sold the stock for $183 per share and converted the dollar proceeds into euro at the exchange rate of $0.90 per euro. First, determine the profit from this investment in euro terms. Second, compute the rate of return on your investment in euro terms. How much of the return is due to the exchange rate movement? (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal places.)2. Mr. James K. Silber, an avid international investor, just sold a share of Nestlé, a Swiss firm, for SF4,930. The share was bought for SF3,100 a year ago. The exchange rate is SF1.60 per U.S. dollar now and was SF2.08 per dollar a year ago. Mr. Silber received SF270.00 as a cash dividend immediately before the share was sold. Compute the rate of return on this investment in terms of U.S. dollars. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)3. Mr. James K. Silber, an avid international investor, just sold a share of Néstle, a Swiss firm, for SF5,150. The share was bought for SF4,670 a year ago. The exchange rate is SF1.95 per U.S. dollar now and was SF1.92 per dollar a year ago. Mr. Silber received SF134 as a cash dividend immediately before the share was sold. Suppose that Mr. Silber sold SF4,670, his principal investment amount, forward at the forward exchange rate of SF1.97 per dollar. How would this affect the dollar rate of return on this Swiss stock investment? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)4. Japan Life Insurance Company invested $10,000,000 in pure-discount U.S. bonds in May 1995 when the exchange rate was 80 yen per dollar. The company liquidated the investment one year later for $10,750,000. The exchange rate turned out to be 110 yen per dollar at the time of liquidation. What rate of return did Japan Life realize on this investment in yen terms? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)5. At the start of 1996, the annual interest rate was 8 percent in the United States and 4.8 percent in Japan. The exchange rate was 108 yen per dollar at the time. Mr. Jorus, who is the manager of a Bermuda-based hedge fund, thought that the substantial interest advantage associated with investing in the United States relative to investing in Japan was not likely to be offset by the decline of the dollar against the yen. He thus concluded that it might be a good idea to borrow in Japan and invest in the United States. At the start of 1996, in fact, he borrowed ¥1,000 million for one year and invested in the United States. At the end of 1996, the exchange rate became 118 yen per dollar. How much profit did Mr. Jorus make in dollar terms?Accounting Business Financial Accounting BSMM 8120

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