Useful Rules and Formulas
Conventions Used in Multinational Finance
- Uppercase letters are used for asset prices, including currency values.
- Lowercase letters are used for rates of change.
- Superscripts indicate currency units.
- Subscripts indicate a point in time (for prices) or a period of time (for returns).
- Continuously compounded returns are in italics.
|Value of an asset in currency c at time t.|
|Inflation (change in the Consumer Price Index) in currency c.|
|Spot exchange rate between currencies d and f at time t.|
|Percent change in the spot rate between currencies d and f in period t.|
|Forward exchange rate between currencies d and f priced at time 0 and for delivery at time t (sometimes denoted ).|
|Price in currency d of a futures contract on currency ...|