Useful Rules and Formulas

Conventions Used in Multinational Finance

  1. Uppercase letters are used for asset prices, including currency values.
  2. Lowercase letters are used for rates of change.
  3. Superscripts indicate currency units.
  4. Subscripts indicate a point in time (for prices) or a period of time (for returns).
  5. Continuously compounded returns are in italics.


bapp01-math-0001 Value of an asset in currency c at time t.
bapp01-math-0002 Inflation (change in the Consumer Price Index) in currency c.
bapp01-math-0003 Spot exchange rate between currencies d and f at time t.
bapp01-math-0004 Percent change in the spot rate between currencies d and f in period t.
bapp01-math-0005 Forward exchange rate between currencies d and f priced at time 0 and for delivery at time t (sometimes denoted bapp01-math-0006).
bapp01-math-0007 Price in currency d of a futures contract on currency ...

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