What is the return on the canadian currency

Reference no: EM13265096

Consider an investment in the Royal Bank of Canada (RBC). Denote the Canadian dollar by C$: Suppose C$1 = $1:05 and suppose RBC stock price is C$25. Thus e0 = 1:05 and p0 = 25: After one year, the local stock price has appreciated to C$28 and the currency has value C$1 = $0:90.

a. What is the price of the $ after one year?

b. What is the local return on on the Royal Bank of Canada stock?

c. What is the return on the Canadian currency, C$.

d. What is the total $ return on an invest ment in the Royal Bank of Canada Stock?

Reference no: EM13265096

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