Currency Sensitivity Quiz From CFA Textbook. Answer this!

CFA Level II
#1

You are a US investor investing in a Swiss stock. The SF loses 1.25% in value against the Dollar, and the Swiss Franc stock price of Novartis increases by 1.25%. The local currency exposure is _________? The domestic currency exposure is __________?

#2

-1 and 0?

#3

yup. local currency exposure = (change in stock/change in exchange rate) = 1.25/-1.25 = -1 domestic currency exposure = local currency exposure + 1, which is -1 + 1 = 0

#4

nice post… Bump