Compute return ignoring the effect of exchange rate

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Annika, A U.S. investor, bought euro denominated bonds when the exchange rate was 0.909 euro to the dollar. She paid $11,881 for the bonds. At the end of the year, the bonds were worth 10,600 euro; she received 400 euro in interest and the exchange rate was 0.921 euro to the dollar.

(i) What was her holding period return in U.S. dollars?

(ii) Compute her return ignoring the effect of exchange rate.

Reference no: EM132524078

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