The total rate of return on an international asset is the:
A) spot rate plus the forward rate.
B) rate of return on the asset plus or minus the expected capital gain or loss on currency changes.
C) rate of return on the asset minus commissions.
D) rate of return plus inflation minus taxes.

Question

Quizplus · Accepted Answer

The total rate of return on an international asset includes the rate of return on the asset (dividends or interest payments) and also the expected capital gain or loss on currency changes. Therefore, option B is the correct answer.

The Total Rate of Return on an International Asset Is