CFAI Book 5 page 226- EXample 1
I have a little problem understanding this example. I thought that the quote should be in price currency /per base currency and that base currency is the investor’s domestic currency. So for Eurozone investor, the base currency is Euro, right? But in this example 1 Problem 1 they say:
“Note that, given we are considering the eurozone to be “domestic” for this investor and given the way the RFX expression is defined, we will need to convert the CAD/ EUR exchange rate quote so that the EUR is the price currency.” I do not understand this. Can anybody explain this to me? Thanks a lot- appreciate it.