International portfolio investment bond calculating

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INTERNATIONAL PORTFOLIO INVESTMENT Bond (calculating return) formula: where R $ = dollar return B(1) = foreign currency bond price at time 1 (present) C = coupon income during period g = currency depreciation or appreciation $ (1) (0) 1 1 (1 ) (0) B B C R g B - + + = + +
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INTERNATIONAL PORTFOLIO INVESTMENT B. Calculating U.S. $ Return Equity Formula: where R $ = dollar return P(1) = foreign currency stock price at time 1 D = foreign currency annual dividend $ (1) (0) 1 1 (1 ) (0) P P D R g P - + + = + +
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U.S. $ Stock Returns: Sample Problem Suppose the beginning stock price if FF50 and the ending price is FF48. Dividend income was FF1. The franc depreciates from FF 20 /$ to FF21.05 /$ during the year against the dollar. What is the stock’s US$ return for the year?
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U.S. $ Stock Returns: Sample Solution 48 50 1 .20 .2105 1 1 1 50 .2105 - + -  = + + -   $ (1) (0) 1 1 (1 ) (0) P P D R g P - + + = + + [ ] [ ] .98 .95 1 = - $ 6.9% R = -
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