Suppose that you purchase a Korean government bond and the number of won needed to purchase one dollar increases.Your return on the bond:

Question

Quizplus · Accepted Answer

When the number of won needed to purchase one dollar increases, it means the won has depreciated relative to the dollar. If you are holding a Korean government bond and the won depreciates, your return in dollar terms decreases by the amount of the dollar's appreciation because you will get fewer dollars when converting the won back to dollars.

Suppose That You Purchase a Korean Government Bond and the Number