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They might do it for 3x the return: "China’s government bonds were among the world’s best performers in 2018, returning 7.7 percent, while U.S. Treasuries earn
by projectramo 8y ago
They might do it for 3x the return:
"China’s government bonds were among the world’s best performers in 2018, returning 7.7 percent, while U.S. Treasuries earned 0.8 percent, ICE Bank of America Merrill Lynch data show. That gain is in yuan terms, however, and the yuan dropped 5.4 percent against the U.S. dollar."
So 7.7 - 5.4 = 2.3%
which is almost 3x 0.8% return on US Treasuries.
- anonymfus 8y ago>So 7.7 - 5.4 = 2.3% Seriously? 0.946 * 1.077 = 1.018842 So about 1.9% which is about 2.4x 0.8% return on US Treasuries.
- nly 8y agoAnd shaved both ways in the forex market
- seppin 8y ago3x given the risk involved? Not worth it
- pkaye 8y agoThat is not how you would do that math though. You have to multiply the percentages. (1+0.077)*(1-0.054)=1.0188 => 1.88%