Returns on investments in foreign securities are unaffected by fluctuations in the value of foreign currencies.

Question

Quizplus · Accepted Answer

Returns on investments in foreign securities are affected by fluctuations in the value of foreign currencies. When the value of the foreign currency depreciates, the return on the investment may decrease. Conversely, when the value of the foreign currency appreciates, the return on the investment may increase. This is known as currency risk.

Returns on Investments in Foreign Securities Are Unaffected by Fluctuations