Suppose a U.S. investor wishes to invest in a British firm currently selling for pound 40 per share. The investor has $12,000 to invest, and the current exchange rate is $2/pound. Consider three possible prices per share at pound 39, pound 44 and pound 49 after 1 year. Also, consider three possible exchange rates at $1.6/pound, $2/pound and $2.4/pound after 1 year. Calculate the standard deviation of both the pound- and dollar-denominated rates of return if each of the nine outcomes (three possible prices per share in pounds times three possible exchange rates) is equally likely. (Round your answers to 2 decimal places. Do not round intermediate calculations. Omit sign "%" in your response.)
Standard deviation of pound-denominated return
Standard deviation of dollar-denominated return