You are a French investor holding some U.S. bonds. Over the month, the value of your bond

Question:

You are a French investor holding some U.S. bonds. Over the month, the value of your bond goes from $1 million to $1.05 million. The exchange rates move from €1 per dollar to €1.02 per dollar.
a. What is your rate of return in dollars?
b. What is your rate of return in euros?
c. Is the difference exactly equal to the percentage movement in the exchange rate? If not, why?
Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...