- Problem #1- Reading 44- Who is local investor??

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First off, do we just assume in this question that we are a swedish investor?? because it says “valuation and performance analysis is done in swedish kroner??
This is the only way I can make sense of the currency contribution question then.
(SKR return on us stocks is 17% and dollar return on US stocks is 30% therefore since we are 50% invested in us stocks, this would be a portfolio currency contribution of
-6.5%
 
im trying to put this in lamens terms. Is this therefore saying “you are a swedish investor who owns us stocks. In SKR you made 17%, but the local/us/$ return when transferred at the exchange rates given , returned 30%, therefore this means that since SKR appreciated relative to the us dollar from skr6/$ to skr5.4/$, THE SWEDISH INVESTOR WAS HURT ON HIS US INVESTMENT SINCE THE HOME CURRENCY SKR APPRECIATED??? SO 17% SKR RETURN ON US STOCKS- 30% DOLLAR RETURN ON US STOCKS IS A -VE13% CURRENCY CONTRIBUTION OF THE US INVESTMENT???
 
Hey wil, thanks for the response. So does this work exactly in the opposite as well?
I.e lets say our USSTOCKS in skr (home) stays same at 17%. (702,000skr/600000skr)-1
So taking the opposite approach, lets say that instead of above where SKR appreciated (from skr6/$ to Skr5.4/$)…… we say that SKR Depreciated relative to dollar…. (from skr6/$ to Skr10/$)
Therefore our us stock portfolio in dollar terms is (702,000/10)/(600000/6)-1 = -30%
So we would say in this case that our currency contribution was “47%”???
Is this correct?
 
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