All exchange rates are expressed as units of foreign currency that can be purchased with one U.S. dollar. Answer the following questions about decomposing the manager's performance.
-What is the difference in return of the manager's portfolio due to currency selection?

Question

Quizplus · Accepted Answer

The difference in return due to currency selection is calculated by comparing the actual return of the portfolio with the return that would have been achieved if the currency exposure had been hedged. A positive difference indicates a favorable currency selection, which in this case is 2%.

All Exchange Rates Are Expressed as Units of Foreign Currency