Suppose you start with $100 and buy stock for £50 when the exchange rate is £1 = $2. One year later, the stock rises to £60. You are happy with your 20 percent return on the stock, but when you sell the stock and exchange your £60 for dollars, you only get $45 since the pound has fallen to £1 = $0.75. This loss of value is an example of Group of answer choices political risk. market imperfections. weakness in the dollar. exchange rate risk.
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Suppose you start with $100 and buy stock for £50 when the exchange rate is £1 = $2. One year later,...
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