Using current exchange rates, what is today’s value of the investor’s portfolio in U.S

Using current exchange rates, what is today’s value of the investor’s portfolio in U.S

Using current exchange rates, what is today’s value of the investor’s portfolio in U.S

Subject: Business    / Finance
Question

One year ago, an American investor bought 1000 shares of London Bridges at a price of £34 (or 34 UK pounds) per share when the exchange rate was $1.4/1£ (or $1.40 dollars = 1 pound). The investor also invested 3,000,000 Japanese Yen in a money market fund in Japan last year when the exchange rate was 110 Yen = $ 1 US.

(a) Using current exchange rates, what is today’s value of the investor’s portfolio in U.S. dollars if the UK investment decreased 20% (in local currency) and the Japan investment increased 2% (in local currency)?

(b) What is the overall rate of return on the portfolio over the last year?