An increase in the value of the yen relative to the dollar has a positive effect on the returns of U.S. investors who invest in stocks of Japanese firms.

Question

Quizplus · Accepted Answer

When the yen increases in value relative to the dollar, it means that each yen is worth more dollars. Therefore, when U.S. investors convert their investment returns from yen back to dollars, they receive more dollars for each yen, enhancing their returns.

An Increase in the Value of the Yen Relative to the Dollar