Sorry if this has been answered before but here goes: In Reading 68 EOCs, questions 6 and 7 calculate the Foreign bond’s return in Domestic currency terms as: (1+Foreign Risk Free rate)*(1+ % change in exchange rate) - 1 Now in problem 11 and 12 it is calculated as: Foreign Risk Free Rate + % change in exchange rate I am under the assumption that the latter method is an approximation and to arrive at actual returns we must multiply. Am I missing something here? Thanks!