Suppose an investor buys a share of Sony at a price of ¥38,720 at the start of the year.During the year,the investor receives a dividend of ¥500.At the end of the year,the price of Sony is ¥49,560.During the year,the exchange rate goes from ¥150 = $1 to ¥175 = $1.What was the investor's dollar return on Sony?

Question

Quizplus · Accepted Answer

First, we need to convert the yen amounts to dollars.

Purchase price: 
¥38,720 / ¥150 = $258.13

Dividend: 
¥500 / ¥150 = $3.33

Ending price: 
¥49,560 / ¥175 = $283.20

Next, we can calculate the dollar return. 
Total dollar return = (ending price + dividend) - purchase price 
Total dollar return = ($283.20 + $3.33) - $258.13 
Total dollar return = $28.40

Finally, we can calculate the percentage return. 
Percentage return = (total dollar return / purchase price) x 100% 
Percentage return = ($28.40 / $258.13) x 100% 
Percentage return = 10.82%

Therefore, the investor's dollar return on Sony was 10.82%. The best choice is B.

Suppose an Investor Buys a Share of Sony at a Price