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Suppose you start with buying a stock in (equivalent to $100 ) when the exchange rate is 1=$1.5. One year later, the stock price changes
Suppose you start with buying a stock in (equivalent to $100 ) when the exchange rate is 1=$1.5. One year later, the stock price changes to 75, and you sell it. At the time of the sale, the exchange rate is 1=$1.6. What is your total percentage return? What percentage of your return is due to the exchange rate? Total return =12.50%; Exchange rate return =6.67%. Total return =20%; Exchange rate return =7.50%. Total return =20%; Exchange rate return =0.0%. Total return =12.50%; Exchange rate return =7.50%. Total return =0.0%; Exchange rate return =7.50%. Total return =20%; Exchange rate return =6.67%
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