Advanced Portfolio - even more problems

[dunbrokin]

Thanks Mike, you are right...that is what appears to happen....but if I
chose a conversion rate of closer to the purchase date (3 years ago) then
that is going to give a miscalculation for today's rate. It would appear
that we need a way of hardwiring in the currency rate when the stock was
purchased.

Thanks for your help in this matter.

On Thu, Jul 16, 2015 at 1:40 PM, Mike Alexander <mta at umich.edu> wrote:

> --On July 16, 2015 at 10:39:43 AM +1200 dunbrokin <dunbrokin at gmail.com>
> wrote:
>
>  Back to BBBY of which the client holds 523 in their portfolio. The
>> basis of this holding in NZ$ today is around NZ$45,750. Now if I go
>> back to look at the basis value of the holding in  December 2014,
>> then the value is NZ$40,125 - no shares have been bought or sold. So,
>> this basis has changed by NZ$5,000 (as in increased) at a time when
>> the value of the NZ$ against the US$ has fallen from 1NZ$ = US$.76 to
>> 1NZ$=US$.66. What am I missing here?
>>
>
> Judging from your previous question, this is a stock that is traded in a
> currency other than the currency of the report.  I.e., BBBY is traded in
> USD but your report currency is NZD.  The report calculates the basis of
> BBBY in USD and then converts it to NZD using an exchange rate determined
> by the option you have set for the report and the contents of the price
> data base.  If you have chosen "nearest in time" as the price source, then
> the NZD/USD exchange rate will be the one nearest to the report's data.
> Even though the basis of BBBY in USD won't change, the basis in NZD will
> change since the USD/NZD exchange rate changes.
>
> This isn't the only way this could be done, and perhaps isn't the best
> way, but it's the way it works now.  It might be better to use a USD/NZD
> exchange rate closest to the date of the transaction that affects the basis
> when adjusting the basis.  There are probably other problems with the
> report if you have stocks traded in currencies other than the report
> currency.
>
>             Mike
>
>