One years German Stock index return in local currency 6.75%
USD/EUR in t0: 1.33
USD/Euro in t1: 1.38
One USD dollar return for american investor? Surely american investor is loosing on FX as he’s getting 1.33 Euro in t0 but then has to pay 1.38 Euro to transfer back into USD in t=1. Therefore he’s lloing approx. 3.8% on FX. And return should be approx. 2.90%…but answer seems to suggest that above FX quotes mean 1.33 USD for one Euro in t=0 and then 1.38 in t=1. That’s when answer would make senss to me. I have done heaps of questions and USD/Eru 1.33 would have always meant 1.33 Euro’s per USD…what’s different here?