If a U.S. investor earns 20% in a pound denominated investment while the U.S. dollar appreciated approximately 5%, the return to the U.S., investor was approximately 25%.

Question

Quizplus · Accepted Answer

The return to the U.S. investor would be less than 20% because the appreciation of the U.S. dollar against the pound reduces the value of the pound-denominated returns when converted back to dollars.

If a US Investor Earns 20% in a Pound Denominated Investment While