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Calculate the nominal U.S. dollar rates of return to a Santa Barbara-based investor on the following asset purchases. Assume that all of the SB investors consumption takes place in the United States. a. A US$100,000 deposit in Banco Santander during a one-year period in which the /US$ exchange rate moved from 1.100 to 1.111 and the interest rate on euro deposits was 2.5 percent appreciated by 3 percent against the Hong Kong dollar c. A South Sea pearl necklace purchased in Hong Kong for HK$7,500 when the US$/HK$ exchange rate was 1.0 and sold for HK$7,450 a year later when one Hong Kong dollar sold for 1.02 U.S. dollars. d. Suppose that the U.S. Consumer Price Index (CPI) increased by 2 percent, the Spanish CPI increased by 1 percent, and the Hong Kong CPI increased by 3 percent over the year in which each asset was owned. What was the real rate of return to the SB investor on the asset from part (a)?

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