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A US investor in a Japan company ADR prefers: a. The Japan stock market to increase...

A US investor in a Japan company ADR prefers:

a. The Japan stock market to increase and the yen to weaken versus the dollar

b. The US stock market to increase and the yen to weaken versus the dollar

c. The Japan stock market to increase and the dollar to weaken versus the yen

d. The US stock market to increase and the dollar to weaken versus the yen

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Answer #1

The US investor has exposure to the Japan market and the currency exchange rate. The investor has invested in a Japan Company with U.S. dollars.

So, an increase in the Japan stock market and the strengthening of the U.S. dollar would benefit the investor.

The correct answer is a. The Japan stock market to increase and the yen to weaken versus the dollar

Note that the weakening of the Yen is the same as the strengthening of the U.S. dollar

Can you please upvote? Thank You :-)

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