1 page with the references.Quincy has recently been hired by an international investment firm that...

Question

1 page with the references.Quincy has recently been hired by an international investment firm that has offices in both London and New York.His boss has asked that he look into investing some of the firm's U.S.-based funds into a British company that currently sells at 80 pounds sterling(GBP) per share.Quincy’s boss has limited his investable funds initially to $100,000.The current exchange rate between U.S. dollars(USD) and GBP is 2USD/1GBP.Given the above scenario, how many shares would Quincy be able to purchase?Calculate the different rates of return and repatriated returns in the below table:Price Per Share (GBP)GBP Based ReturnUSD Denominated Return1.80USD/1GBP2USD/1GBP2.20USD/1GBP708090Explain why the results vary so much.How do the exchange rates vary the results more than expected here?

David · Accepted Answer

Question 1: Given the above scenario, how many shares would Quincy be able to purchase? 
Amount Available for Investment = $100,000 
Current Share Price of the proposed company = 80 GBP per share 
Current Exchange rate between USD and GBP = 2USD/1GBP 
Hence, share price of the company in USD = 80 * 2 = 160 USD 
Number of shares that Quincy be able to purchase in the current scenario = 100,000/160 = 625 
shares.  
Question 2:

Price Per Share (GBP)	GBP Based Return	USD Denominated Return
1.80USD/1GBP	2USD/1GBP	2.20USD/1GBP
70
80
90

1 page with the references. Quincy has recently been hired by an international investment firm that has offices in both London and New York.His boss has asked that he look into investing some of the...

Solution

Answer To This Question Is Available To Download

Related Questions & Answers

Submit New Assignment