Final answer:
The pound rate of return on the investment is 1.89%, the change in the pound-euro exchange rate is €0.14, and the euro rate of return is 90.73%. If £8,000 were sold forward at the rate of €1.36 per pound, the euro rate of return would be 100%.
Step-by-step explanation:
The pound rate of return on this investment can be calculated by dividing the dividend received by the initial investment and multiplying by 100. In this case, the dividend is £1 and the initial investment is £53, so the pound rate of return is (1/53) * 100 = 1.89%. The change in pound-euro exchange rate can be calculated by subtracting the initial exchange rate from the final exchange rate. In this case, the initial exchange rate is £1 = €1.50 and the final exchange rate is £1 = €1.36, so the change in the pound-euro exchange rate is €1.50 - €1.36 = €0.14.
The euro rate of return can be calculated by dividing the euro amount received from the sale of shares by the euro amount invested and multiplying by 100. In this case, the euro amount received is £53 * €1.36 = €72.08 and the euro amount invested is £53 * €1.50 = €79.50, so the euro rate of return is (72.08/79.50) * 100 = 90.73%.
If you had agreed to sell £8,000 forward at the rate of €1.36 per pound, you would receive €1.36 * £8,000 = €10,880. The euro rate of return on this investment can be calculated by dividing the euro amount received from the forward sale by the euro amount invested and multiplying by 100. In this case, the euro amount received is €10,880 and the euro amount invested is £8,000 * €1.36 = €10,880, so the euro rate of return is (10,880/10,880) * 100 = 100%.