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The return from investing in foreign assets is affected by the performance of the foreign assets and the fluctuation in the exchange rate of the
The return from investing in foreign assets is affected by the performance of the foreign assets and the fluctuation in the exchange rate of the foreign country. Using the information given below, calculate the rate of dollar return from an investment in a 5-year Canadian Treasury bond with face value of C$100 and pays 5% coupon which you bought year ago and sold it today:
Price of Canadian bond year ago: C$101
Price of Canadian bond today C$103
Canadian dollar exchange rate last year: $0.8200/C$
Canadian dollar exchange rate today: $0.8250/C
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