6.An investor in the U.S. takes US$1,000,000 on January 1, 2002 and invests in shares traded on the Tokyo Exchange (TSE). 9 S, = ¥130.00/5 On January 1, 2002 the spot rate was so the investor received ¥130,000,000 and used this to acquire 6,500 shares at ¥20,000 each. On January 1, 2003 the investor sold the shares at a price of ¥25,000 per share yielding S = ¥125.00/5 ¥162,500,000 and converted the shares back to USS at the new spot rate which resulted in $1,300,000. To calculate the return on a cross-border investment both the change in the share price and the change in the currency value affect the total return of the portfolio. The formula for the total return in U.S. dollars is given below: R 1+1 shares,