What is the investor return in us dollars

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A US dollar-based investor buys shares in a yen-denominated Exchange Traded Fund (ETF) on December 31 that replicates the market. In other words, the ETF buys shares in exact proportion to their weights in the Nikkei stock market index, so the returns to the investor on the stocks will be the same as the index returns. The Nikkei is trading at 10,391.92 and the exchange rate is 86.84 yen per dollar. The investor closes out the trade on March 18 of the next year. At that time the Nikkei is trading at 12,220.63 and the exchange rate is 95.26 yen per dollar.

a) What is the investor's return, in U.S. dollars. on this transaction?

b) How did the investor make money. if any, on this trade? Was it through stock market appreciation, currency appreciation, or both?

Reference no: EM132477786

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