If the local currency appreciates by 3 against the dollar


Bond A has a par value of 1,000 in local currency, at coupon rate of 5% with 5 years to maturity and sold at 990 in local currency. One year later, the discount rate was 6%, and Bond is currently selling at 965.35 in local currency. If the local currency appreciates by 3% against the dollar during the period, what is the total dollar return?

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Financial Management: If the local currency appreciates by 3 against the dollar
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