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Business, 31.05.2020 04:58 alexandria3498

Assume that you are a U. S. investor who is considering investments in the German (Stocks A and B) and British (Stocks C and D) stock markets. The world market risk premium is 4.5%. The currency risk premium on the euro is 1%, and the currency risk premium on the pound is 1%. In the United States, the interest rate on one-year risk-free bonds is 4%. In addition, you are provided with the following information: Stock A B C D Country w € Germany Germany 1.5 0.9 1 0.8 United Kingdom 1  United Kingdom 1.5 1   0.75 1  £ Calculate the expected return for each of the stocks. The U. S. dollar is the base currency. (

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