Foreign Denominated Portfolio calculation?

Question

Does anyone know of a calculation to use to estimate the return you could get with a portfolio denominated in a foreign currency, Say the portfolio would hold 13% interest government bonds, and a local mutual fund returning 30% a year-all denominated in that country's currency.

Answer 1

The best way is to bypass returns in local currency altogether and compute dollar returns from dollar values of the portfolio. You figure out how much your portfolio was worth in dollars at the beginning of the period and at the end of the period. The percentage difference between the two is your return.