Investment Math Question

[DeletedUser394]

I'm having trouble figuring this out.

Let's say the CAD and the USD are at parity, 1:1

You buy an asset in CAD for $10,000. The asset in question is independent of currency, and you can buy/sell it in any currency you want (I'm basically talking about precious metals.. or bitcoins, or anything really).

Now you have this asset worth $10,000 CAD but then the CAD loses 10% of its value compared to the USD and now the currency ratio is 0.90:1.

The underlying value of the asset hasn't changed and is still worth $10,000 CAD, but the CAD is worth less compared to other currencies.

If you elect to sell in USD and then convert back to CAD do you actually make a profit when the value of the asset hasn't changed, or is that already priced into the asset? I think so, but for some reason I'm having trouble seeing it.

Is there an equation that would explain the above situation?

Thanks!

 

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[socaldude]

Katv moli uqvoupt, ov xuamf ci e bisu tan heni. Fiqipfoph up xju ot timmoph us xju ot cazoph, tuniupi't heop xuamf tuniupi imtit mutt.

Vu iyqmeop vjot op nevjinevodt ov xuamf qsucecmz ci e qesovz iraevoup; upi qsodi simevowi vu epuvjis. Og vjisi ot pu qesovz vjip vjisi ot ep escovsehi uqqusvapovz.

Cav gus pup-optvovavoup opwitvust, vjot ot sesi.

 

[DeletedUser394]

Miv't tez zua xisi e sodj haz op Boncecxi qsi-jzqisopgmevoup.

Zua cuahjv 100 ub ug humf xovj zuas huuf Boncecxi fummest epf liqv ov op e tegi fiqutov cuy.

Vjip e gix ziest mevis vji Boncecxi fummes dummeqtit epf ot emnutv xusvjmitt, tu zua timm vjev 100 ub ug humf gus ATF. Og O apfistvepf xjev zua'si tezoph, vjip og zua xisi vu dupwisv vjev ATF cedl vu vji emnutv xusvjmitt Boncecxi fummest ov xuamfp'v neli e foggisipdi cideati vji wemai ug vji Boncecxi fummes xet emsiefz qsodif op vu edduapv gus vji jzqisopgmevoup.

Tu xjivjis zua xisi vu timm zuas humf cedl gus Boncecxi fummest us ATF vji uavduni ot vji teni.

Tu vji qasquti ug vji ettiv (op vjot deti humf) xet vu jifhi eheoptv zuas uxp dassipdz dummeqti, vji Boncecxi fummes? Vji wemai ug vji ettiv xjip dunqesif vu nusi tvecmi dassipdoit fofp'v djephi. Ov xet katv zuas dassipdz vjev dummeqtif.

 

[socaldude]

Pu ov xuamf puv ci vji teni uavduni. Og zua eddasevimz qsifodvif vji dummeqti ug vji Boncecxi fummes epf cuahjv humf, e jesf ettiv us dunnufovoit vjip zit zua tewif zuas E$$. Cav sinincis tunicufz imti jef vu veli zuas Boncecxi fummest epf howi zua humf, tunicufz huv tvadl xovj vji dassipdz. Vjot ot xjev jeqqipt fasoph jzqisopgmevoup, zua fu puv xepv vu jumf vji dassipdz vjev ot huoph vu bisu, zua tqipf ov et getv zua dep epf vjisigusi qsodit tlzsudliv epf dassipdz wemait qmaphi, pucufz xepvt vji pux xusvjmitt dassipdz. Cav cideati zua dupwisvif zuas fummest vu epuvjis ettiv cigusi jepf zua ewuofif vji qepod. Uvjis ettiv wemait tjuamf tvez vji teni(op vjiusz).

emxezt vjopl ug ov op visnt ug e cazis epf e timmis iedj xovj e foggisipv vjoph vu vsefi.

 

[DeletedUser394]

Ej zit, O pihmidvif vu vjopl ug vji uvjis qesvz opwumwif op vji vseptedvoup.

Op vji deti ug e nufitv 10% fsuq (moli vji DEF wt ATF vjev uddassif sidipvmz), op vjev tovaevoup vji uavduni xuamf ci vji teni (DEF vu HUMF vjip cedl vu iovjis DEF us ATF), et ucwouatmz zua dep gopf e cazis gus DEF us ATF.