When a U$.$S$.$ investor buys a Canadian stock denominated in Canadian dollars, which scenario best illustrates the interplay of stock appreciation and currency fluctuations?

The investor's return is solely determined by the Canadian stock's performance, irrespective of exchange rate movements.

A depreciation of the Canadian dollar relative to the U$.$S$.$ dollar may negate gains from the stock's price increase, reducing overall returns.

Appreciation in the stock's price guarantees a positive return even if the currency weakens, due to hedging protections inherent in foreign listings.

Currency risk is irrelevant if the investor holds the stock for a long time, as long$-$term exchange rates tend to converge