When calculating Total Return in LC: When weighting the LC capital gains…you weight them by the Domestic Weights…correct?
What you mean?? Aren’t there only one single set of weights? I mean one for portfolio and one for benchmark. You use portfolio weights.
no you weight them by your portfolio (your currency) weights
OK. If spot exchange rate is 2 Foreign/Domestic, at the end of period 3Foreign/Domestic I have 5 shares, 5 bonds each 2 foreign now,(10 foreign worth of shares 10 foreign worth of bonds), at the end of the period they are 3 foreign (15/15). How can the weights be different in foreign or local currency?
what if you have JPY and GBP, how will you wait those in foreign currency??? you can only weight by coming to one denominator
Hmmm. Thanks CSK. Now I understand. I guess
yes…csk is right.