Question

How do performances of the foreign exchange markets compare with domestic stock markets?

Answer 1

Performance of the foreign exchange markets are compared with the domestic stock market after being adjusted for the change in the exchange rate because it is not just about the change in the rate of return of the foreign market but that rate of return has to be relativity adjusted with the appreciation and depreciation of both the currency involved, so it can be said that after we are converting the rate of return of the foreign currency into the domestic currency then only those rate of return are realized and hence all the rate of return on the international transaction has to be properly translated into domestic currency in order to to compare it from the perspective of the domestic rate of return