Hey all: Really silly question that I need to ask: If we want to compute the Currency impact, do we do this? Say for example - Yen moves from 100 to 105 vs the dollar. T1: Yen/Dollar = ¥100 / 1 ¥1 = .001 T2: Yen/Dollar = ¥105 / 1 ¥1 = .009524 So even though the Yen increased by 5% (¥100 -> ¥105) in absolute terms (the numerator) - the currency return/impact on the yen should be calculated as [(1/100 - 1 / 105)] = -0.000476 x 100 , so it lost 4.76% of its value. Just the opposite, the $ gained 4.76% of value. (An extreme example, using the same logic, Yen goes to ¥250/1 - it increased by 150% in the numerator but the actual % loss is -60%.) [The dollar goes from .01/ yen to .004/yen so it gained +60% in value] \*\*\*\*\*\*\*\* Given that - So, the example in Reading #44 (on page 86 v6) of CFAI text, we can get to the -5.24% return on the currency contribution and the Rate of return on the as: Where Return on the Asset (Local Currency) = R(LC) = 10% and RETURN on Currency = R(S) = -4.76% R$ = R(LC) +[R(S) + R(LC)(R(S)] R$ = 10% + [-4.76% + [-4.76% x 10%]] R$ = 10% - 5.24% R$ = 4.76% (this just happens to be the same % as the currency - by chance) If I used -60% (per my extreme scenario above) R$ = R(LC) +[R(S) + R(LC)(R(S)] R$ = 10% + [-60% + [-60% x 10%]] R$ = 10% - 66% R$ = -56% Loss in US Dollar Value (despite a 10% increase in the Asset in in Local Currency) Am I doing this right?

Maybe another way to get to the % gain loss is? C(0) - C(1) -------------- C(1) (100-105) / 105 = -4.76% (yen decreases by 4.76%, increases by same) or (100-250) / 250 = -60% (yen decreases by 60%, increases by same) another example going the other way… (100 - 75) / 75 = 33% (yen INCREASES by 33% and $ decreases by the same) Sry all - for some reason I get mixed up on currencies - thats why when I’m in foreign country and trying to order from a McDonalds - I cant figure out why a friggen ‘Le Big Mac’ is so darn expensive or cheap… Am I on the right track?

C(1) - C(0) -------------- C(0) I believe this would be the right formula, when you are using direct.