Quick question… A US investor is buying a japanese investment Therefore his dollar return will equal the return in the japanese investment and the % change in the USD/JPY Currency. For example, if stock goes up by 10% and the yen goes up by 5%, his total “Gain” would be 15%. (Not a perfect example, I know). I am looking at reading 68 in schweser. If the YEN appreciates in value against the dollar, isn’t the dollar worth less? How would there be a gain here? What am I missing?
The investment is denominated in Yen.
Also, aren’t the gains multiplicative in this instance? As in the gain would be (1.05)(1.1) = 1.155?