Suppose someone holds a security denominated in Australian dollars. If the Australian value of the security does not change but the U. S. dollar depreciates relative to the Australian dollar, the security holder has a

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If the U.S. dollar depreciates relative to the Australian dollar, the value of the security in terms of U.S. dollars increases, resulting in a paper gain for the holder.

Suppose Someone Holds a Security Denominated in Australian Dollars