If a British investor and an American investor both use British pound sterling to invest in the stock of a British firm, and the value of the dollar depreciates relative to the value of the pound
Sterling, then

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If the value of the dollar depreciates relative to the pound sterling, then the American investor will have to use more dollars to purchase the pounds needed to make the investment. This means that the American investor's return in dollars will be worth less due to the depreciation. Therefore, the American investor will earn a lower total return on the investment compared to the British investor who did not experience the same currency depreciation. If the value of the dollar depreciates relative to the value of the pound Sterling, then the American investor will have to pay more dollars to purchase the pounds necessary to invest in the British firm. As a result, the American investor's initial investment in dollars will be worth less when it is converted back into dollars upon selling the stock. Therefore, the American investor will have earned a lower total return on the investment than the British investor.

If a British Investor and an American Investor Both Use