Stalla Q-Bank users

L3-0098: A German investor buys a British stock priced at £50.50 when the exchange rate is €0.30/£. The price of the stock falls to £47.00 and the exchange rate changes to €0.34/£. Assuming that currency futures change by the same percentage as does the spot exchange rate, what are the unhedged and fully-hedged returns on the stock for the German investor in his or her home currency? Unhedged = +5.5% - that I’m ok With Hedged return = -20.3% - for some reason I keep getting -7.85%!!! I’ve been doing this problem the same was as all the others and I can’t figure it out…well i did it another way and got the answer but I dont think the method was correct. Stalla even gives the answer as: % Hedged Return = Rh = Rd - Fr = -6.93% - 13.33% = -20.3% I even tried using $50,500 for beginning value and 47,000 for ending value so it was in a larger denomination to work with. So for my hedged return I was doing this: rh = [50,000(.3-.34) + (47,000*.34 - 50,500*.3)]/(50,500*.3) = -2,020 + (+830) / 15150 = -1190/15150 = -7.855% The hedge actually lost 13.33% plus the return on the Unhedged return of +5.5% = -7.83% So what the heck is going on here?? I tried to check their errata and I get a blank page…

Nevermind…finally the Errata worked for me…and they fixed it to my Answer!!! I JUST WASTED 30 Minutes of study time trying to figure out how I was wrong!!!