Inflation and fluctuations in foreign-currency exchange rates affect performance measurement.

Question

Quizplus · Accepted Answer

Inflation and fluctuations in foreign-currency exchange rates can impact the value of investments and thus affect performance measurement. This is because inflation can erode the real value of returns, and currency exchange rate changes can affect the value of investments denominated in foreign currencies. Therefore, it is important to consider these factors when measuring investment performance.

Inflation and Fluctuations in Foreign-Currency Exchange Rates Affect Performance Measurement