Task: A French investor buys $100 shares of Goodyear Corp. for $3,000($30 per share). Over the course of a year, the stock goes up 6 points.
Q1. If there is a 10 percent gain in the value of the dollar versus the euro, what will be the total percentage return to the French investor? First determine the new dollar value of the investment and multiply this figure by 1.10. Divide this answer by $3,000 to get a percentage value, and then subtract 100 percent to get the percentage return.
Q2. Now assume the stock increases by 8 points, but that the dollar decreases by 14 percent versus the euro. What will be the total percentage return to the French Investor? Use .86 in the place of 1.10 in this case.