Changes in exchange rates

Question

Quizplus · Accepted Answer

All options are correct. 
A) Changes in exchange rates have a larger impact on foreign bond indexes because bonds are denominated in different currencies and changes in exchange rates affect the value of these assets. 
B) Different factors can affect each foreign equity market, such as economic conditions, political instability, and market sentiment. Therefore, exchange rate changes affect foreign equity markets differently. 
C) Exchange rate changes have an impact on dollar-denominated foreign equity returns, but investors can use hedging strategies to mitigate this risk. 
Overall, changes in exchange rates can have significant effects on both foreign bond and equity markets, and investors should consider these risks when investing in international assets.

Changes in Exchange Rates