One year ago, an American investor bought 1000 shares of London Bridges at a price of £62 (or 62 UK pounds) per share when the exchange rate was $1.5/1£ (or $1.50 dollars = 1 pound). The investor also invested 1,800,000 Japanese Yen in a money market fund in Japan last year when the exchange rate was 85 Yen = $ 1 US.
(a) Using current exchange rates, what is today's value of the investor's portfolio in U.S. dollars if the UK investment decreased 5% (in local currency) and the Japan investment increased 1% (in local currency)?
(b) What is the overall rate of return on the portfolio over the last year?