PalacioHill

deriv108 Wrote:
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> You are an American with a holding in Japan that
> moved up in value from 100 to 125 JPY and at the
> same time the Japanese currency depreciated by
> 10%. (100 JPY/USD to 110 JPY/USD)
>
> State what are the:
>
> Total Return
> Local Return
> Return segmented by capital gains, currency and
> yield.
>
> Total return:
> R=(125/100)*[(1/110)/(1/100)]-1=1.136-1=13.6%
> Local return=125/100-1=25%
>
> R(cg)=25%
> R(currency)=13.6%-25%=-11.4%
> R(yield)=0

I hate their rounding, it is so very inconsistent.

In 2000 exam they had a PV factor that was taken out 9 places. 9 places. At least 2 places after the decimal seems logical however.