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Currency exchange & your investment
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Currency exchange & your investment

You can calculate the price in dollars of a stock selling in another currency by dividing the price you pay by the exchange rate. For example, suppose you bought stock for 60 euros per share at an exchange rate of 1.15 euros per dollar.



Your cost per share would be $52.17. Because the dollar is stronger than the euro, you’re buying at a discount.

You can also figure your gain or loss by subtracting the price you paid for the investment from the price at which you sold, and then dividing by the price you paid. Suppose you paid $52.17 per share, and the price increases to $65.



If the two currencies maintain the same values, your gain is 24.6%.

But if at the time you sold, the dollar had increased in value and the exchange rate was 1.20 euros per dollar, your gain would be the difference between the purchase and sell price of your investment, divided by the exchange rate of 1.20.



Your gain would actually be $10.69, which is a gain of 20.5%.


     
   
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