n NISM Certifications
V-A NISM Series V-A
Medium

On which of the following factors does returns from an international fund depend on?

Practice question from Nism VA Mock Test 5 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Asset Class performance

  2. B

    Foreign currency exchange rates

  3. Both 1 and 2

    Correct answer

Why this is the answer

Returns from an international fund depend both on the performance of the underlying asset class (e.g., equities) and on foreign currency exchange rates. A change in the value of the local currency (e.g., INR) relative to the foreign currency (e.g., USD) can significantly affect returns.

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