BierCo is a beer company based in Germany. You purchased the stock in 2011 for 100 Euros when the exchange rate was 1.4 EUR / USD. Today BierCo's price is 120 Euros and the exhange rate is 1.12 EUR/USD. What is the dollar-denominated total return? Express in decimal total return format (i. e., 0.01 represents 1%).

Decimal total dollar denominated return is 0.50

Explanation:

The dollar purchase price of the stock = 100/1.4*$1

=71.42857143 * $1

=$71.42857143

today's dollar selling price = 120/1.12*$1

=107.1428571 * $1

=$107.1428571

Dollar denominated total return in money terms=$107.1428571 - $71.42857143

=$35.71428571

However the dollar-denominated return in percentage terms is computed the below formula

dollar denominated return % = (today's price-initial price) / initial price

= ($107.1428571 - $71.42857143) / $71.42857143

=0.50 which represents 50%