# currency convention or error? wtf.

on page 225 of cfai curriculum volume 6, question #5, the chart says Euros per Dollar 1.1. Does this not mean freaking 1.1 Euros per dollar??? but in the solution they used 1.1 dollar per euro to get their answer. WTF. is this an error? or is this just mkt convention that we are supposed to know? i know we hit on this earlier, but i don’t remember us coming to a conclsion on it… thanks.

I was just doing this one and cI did not see any problems with the solution. Which Part are you talking about? Here are my calculations for the France portfolio (upto part c) Part A) For France Local currency Return = (32000 - 25000) / 25000 = 0.28 Return: Beginning Value 22727 ( 1.1 Euro .= 1 ===> 25000 Euro = 25000 /1.1 ) Ending Value = 26667 Return = ( 26667 - 22727) / 22727 = 17.34 B. Capital Gains in Local Currency = 28% Currency Contribution = 17.34 - 28 = -10.67 C. Currency Contribution is as in part b, Market contribution = 6.211 (france index return) implying that Security selection = 28 - 6.21 = 21

Wow. YES. you are absolutely correct and i was completely spacing out… i’m chugging through all of these problems and i really don’t have an idea why i was having problems with a simple currency conversion. scary, i really stared at this for 5 or 6 minutes. thanks for the reply, sv…