Professional Documents
Culture Documents
Beaver 1982
Beaver 1982
Foreign Currency Translation and Changing Prices in Perfect and Complete Markets
Author(s): William H. Beaver and Mark A. Wolfson
Source: Journal of Accounting Research, Vol. 20, No. 2, Part II (Autumn, 1982), pp. 528-
550
Published by: Wiley on behalf of Accounting Research Center, Booth School of Business,
University of Chicago
Stable URL: http://www.jstor.org/stable/2490885
Accessed: 26-06-2016 00:43 UTC
Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at
http://about.jstor.org/terms
JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted
digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about
JSTOR, please contact support@jstor.org.
This content downloaded from 157.89.65.129 on Sun, 26 Jun 2016 00:43:14 UTC
All use subject to http://about.jstor.org/terms
Journal of Accounting Research
Vol. 20 No. 2 Pt. II Autumn 1982
Printed in U.S.A.
1. Introduction
528
This content downloaded from 157.89.65.129 on Sun, 26 Jun 2016 00:43:14 UTC
All use subject to http://about.jstor.org/terms
CURRENCY TRANSLATION AND CHANGING PRICES 529
This content downloaded from 157.89.65.129 on Sun, 26 Jun 2016 00:43:14 UTC
All use subject to http://about.jstor.org/terms
530 JOURNAL OF ACCOUNTING RESEARCH, AUTUMN 1982, PT. II
either property. As discussed more fully in section 1.2, this has not been
well understood in the accounting literature.
In order to conduct our analysis, we assume the well-defined setting of
perfect and complete markets among and within all countries. In doing
so, we recognize that these conditions may be stronger than needed.3
Moreover, we acknowledge a major conundrum in assuming the existence
of a monetary unit in a world of perfect and complete markets.4 However,
given the current state of the art in accounting for foreign currency
translation, there are some compelling reasons for adopting this perspec-
tive: (1) Much of the discussion of the relative merits of the various
translation methods effectively assumes that markets are perfect and
complete. That is, we shall show that perfect and complete markets are
a sufficient condition for the various methods to have the properties their
advocates claim they have. (2) Perfect and complete markets may provide
a reasonable description of the markets for at least some currencies.5 (3)
An analysis of a simple, well-defined setting can be a prerequisite to
dealing with more complicated, albeit more realistic, settings of imperfect
and incomplete markets. For example, there is no reason to believe that
difficulties of interpretation which can arise even in this simple setting
will disappear when a more complex, ill-defined setting is introduced.
The analysis consists of three sections. Sections 2 and 3 deal with
foreign currency translation for monetary and nonmonetary investments,
respectively. Section 4 discusses empirical implications of the analysis.
The paper closes with a discussion of the implications of relaxing the
assumptions of perfect and complete markets (section 5).
3 A weaker set of assumptions would also be sufficient (e.g., spanning). What is important
is that there be nothing "unique" about foreign assets or claims relative to domestic assets,
insofar as state contingent payoffs denominated in terms of a common numeraire are
concerned.
4 In such a world, there would be zero demand for money and contracts would be written
directly in terms of commodities. This conundrum is not distinctive to our analysis of
foreign currency but is prevalent throughout the international economics and finance
literature. Moreover, it is similar to analyses in the finance literature which assume
securities markets are sufficiently complete to imply prices for primitive claims (see Grauer
and Litzenberger [1979], among others).
5 In some nominal sense, markets cannot literally be perfect or complete. Otherwise, it
would be difficult to explain the existence of some (costly) aspects of our institutional
framework (e.g., the existence of money and forward contracts in foreign currencies).
However, the mere existence of this set of contracting opportunities may permit the same
allocations that would be attainable in markets that were literally perfect and complete
(e.g., see Arrow [1963], among others). Hence, perfect and complete markets may provide
a "reasonable approximation" for such markets. See section 4 below.
This content downloaded from 157.89.65.129 on Sun, 26 Jun 2016 00:43:14 UTC
All use subject to http://about.jstor.org/terms
CURRENCY TRANSLATION AND CHANGING PRICES 531
This content downloaded from 157.89.65.129 on Sun, 26 Jun 2016 00:43:14 UTC
All use subject to http://about.jstor.org/terms
532 W. H. BEAVER AND M. A. WOLFSON
books of the respective firms at the end of the year (t = 1), and hence we
draw no distinction between historical cost and market value accounting.
There is an initial investment of one unit (i.e., If = Id = 1) and the
nominal rate of return is Rf and Rd, respectively. Clearly, these invest-
ments are economically equivalent.6
Appendix B summarizes the financial statements reported assuming
the translation takes place at the current rate (i.e., at E1). In this setting,
(1) both economic interpretability and symmetry are obtained, and (2)
the incorporation of the translation gain or loss is essential to the
attainment of these properties.
The translated balance sheet amount is equal to that of the domestic
investment (i.e., 1 + Rd), which implies symmetry. Moreover, that
amount is equal to the market value of those assets or their present value
of the future cash flows (if reinvested), which implies economic inter-
pretability. The translated net income, after inclusion of the translation
gain or loss, is equal to that of the domestic investment and, in turn, is
equal to the nominal rate of return (Rd), which implies symmetry and
economic interpretability, respectively.
Taken separately, each component of net income (the translated inter-
est income and the translated gain or loss) has no obvious interpretation
or relationship to an identical domestic investment. However, when
combined, their sum is a net income number equal to Rd, the amount of
income that would be reported on a domestically equivalent asset. Hence,
the incorporation of the translation gain or loss is essential to attaining
symmetry and economic interpretability. This occurs because the changes
in exchange rates reflect the differences in nominal return due to differ-
ences in inflation rates. Merely translating interest income, even at the
current rate of exchange, is inadequate because this ignores the fully
anticipated change in the purchasing power of the principal (relative to
the domestic currency) which accounts for the Rf and Rd differential.
For example, if if exceeds id, there will be a larger, fully anticipated loss
in the purchasing power of the principal of the foreign investment. To
compensate investors for incurring this anticipated loss, equilibrium
requires that Rf be higher than Rd. Translating Rf at the current exchange
rate overstates net income because it includes only a portion of the effect
of the transaction. It records the added compensation for incurring the
loss on the principal, but neglects the loss itself. Net income, including
the translation loss, incorporates both the added compensation in interest
6 Two investments (e.g., domestic and foreign) are economically equivalent for the period
t- 1 to t if and only if CftEt = Cdt, Mft-iEt-i = Md,t-1, and MftEt = Mlt, where Ct (Cdt) is
the cash flow received on the foreign (domestic) investment at time t and Et is the exchange
rate at time t as defined in Appendix A. In other words, (1 + Rft)Et = (1 + Rdt) where
Rft(Rdt) is the nominal rate of return from t - 1 to t. From relationships R1-R4, it can be
shown that this implies the equality of real rates of return (i.e., rf = rd) for economically
equivalent investments. In equilibrium, all assets are economically equivalent in the case of
certainty.
This content downloaded from 157.89.65.129 on Sun, 26 Jun 2016 00:43:14 UTC
All use subject to http://about.jstor.org/terms
CURRENCY TRANSLATION AND CHANGING PRICES 533
income and the loss in relative purchasing power of the principal. The
net result is a correctly stated net income number (i.e., Rd is reported).
The role that the translation gain or loss plays in monetary items may
seem transparent and obvious. Surprisingly, the literature is ambiguous
on this point, often viewing it as a plug figure to make the financial
statements articulate. Consider Aliber and Stickney's [1975] discussion
of foreign currency translation in a perfect markets setting. In criticizing
FAS No. 8, they state: "Thus the current methodology for translating
foreign assets and liabilities into dollars assumes that the Purchasing
Power Parity theory [changes in relative prices equal experienced changes
in exchange rates] holds while the Fisher Effect [anticipated changes in
exchange rates equal relative differences in interest rates] does not.
Nonmonetary items are not considered exposed to exchange losses while
monetary items are exposed to such losses" [1975, p. 46].
Our analysis suggests that the translation gain or loss is required to
attain economic interpretability and symmetry, even when the Fisher
Effect is assumed to hold. In particular, relationships RI through R4
imply the Fisher Effect; and it is precisely because the Fisher Effect holds
that the incorporation of the translation gain or loss is required.
It is trivial to extend the analysis to monetary liabilities and to
multiperiod monetary items in a certainty setting.7 However, no further
insight would be provided. Instead, we now turn to the more general case
of uncertainty, and henceforth certainty is only treated as a special case.
7 Under certainty, it is easy to force historical cost book values for monetary investments
(and the related income) to coincide with market value numbers by selecting the appropriate
amortization schedule of any discount or premium (Beaver [1979]).
This content downloaded from 157.89.65.129 on Sun, 26 Jun 2016 00:43:14 UTC
All use subject to http://about.jstor.org/terms
534 W. H. BEAVER AND M. A. WOLFSON
ex post real rates of return (i.e., rf = rd). For example, consider a foreign
investment whose ex post real rate of return is rf. [Rd represents the
nominal return of the foreign investment expressed in terms of the
domestic currency. An investor would be indifferent between a foreign
investment whose return is Rf and a domestic investment whose return
is fRd. Alternatively stated, [Rd is the nominal return on an economically
equivalent domestic investment, a quantity which figures prominently in
the analysis below.
In the case of multiperiod monetary investments, care must be exer-
cised regarding assumptions about end-of-period market values. In gen-
eral, the market value will not equal the book value under a predeter-
mined amortization schedule, because no such schedule is capable of
incorporating the unanticipated movements in market value. The key
feature of the uncertainty analysis is the richness of exchange rates in
reflecting unanticipated inflation. This richness permits foreign currency
translation methods to attain economic interpretability or symmetry,
even when uncertainty is introduced.
2.3.1. Single Period Monetary Investment. Our analysis in this section,
in which we consider a single-period monetary investment, represents the
uncertainty analogue to section 2.2. The initial investment is again one
unit (i.e., If = Id = 1), and the nominal returns Rf and Rd are known with
certainty. Appendix C summarizes the reported financial statement
amounts assuming translation at the current exchange rate.
As in the certainty case, the translated results, including the translation
gain or loss, exhibit both symmetry and economic interpretability. The
net income, after the translation gain or loss, is equal to fRd, the nominal
rate of return of the foreign investment (denominated in the domestic
currency), whose real rate of return is equal to rf. The translated net
income is equal to that attributable to a domestic investment if and only
if rf = rd (i.e., when the two investments are economically equivalent). In
other words, symmetry is also preserved.
As in the certainty case, the translated net income, prior to the
translation gain or loss, has no obvious interpretation.8 In contrast to the
certainty case, however, the translation gain or loss is not fully antici-
pated. As such, it is a partial reflection of the exchange rate uncertainty
and contains an unanticipated portion. If there is substantial uncertainty,
this could result in large unanticipated changes in earnings over time.
While many appear to view earnings volatility as "undesirable," it is a
natural reflection of the economic consequences of holding a foreign
monetary investment under conditions of exchange rate uncertainty.9
8 One exception is where iL = if, in which case there is no translation loss and since El
= Eo, the H/C method is equivalent to the H/H method. Hereafter, this is referred to as
the trivial case.
9 For example, one of the major claims made on behalf of FAS No. 52 is that net income
will be less volatile because of the exclusion of translation gains and losses (Seidler and
McConnell [1982]).
This content downloaded from 157.89.65.129 on Sun, 26 Jun 2016 00:43:14 UTC
All use subject to http://about.jstor.org/terms
CURRENCY TRANSLATION AND CHANGING PRICES 535
W For example, in theory, the temporal method of FAS No. 8 is a hybrid of the C/C and
H/H methods. In practice, because of the treatment of long-term monetary assets and
liabilities, it is a hybrid of all three methods. The all-current method is a hybrid of the C/C
and H/C methods. The current-noncurrent and the monetary-nonmonetary methods are
hybrids of all three.
This content downloaded from 157.89.65.129 on Sun, 26 Jun 2016 00:43:14 UTC
All use subject to http://about.jstor.org/terms
536 W. H. BEAVER AND M. A. WOLFSON
The analysis here is simpler than for the case of monetary investments,
because nonmonetary investments are defined to be riskless in real terms.
" This provides a potential rationale for opposition to FAS No. 8, which required long-
term monetary items to be translated at current rates. The failure to include translation
gains and losses in net income under FAS No. 52, which requires the all-current method,
could be similarly motivated, although direct charges to equity under FAS No. 52 still result
This content downloaded from 157.89.65.129 on Sun, 26 Jun 2016 00:43:14 UTC
All use subject to http://about.jstor.org/terms
CURRENCY TRANSLATION AND CHANGING PRICES 537
The key feature of this type of investment is the absence of cash flow
in the first period (i.e., Cd = Cf = 0). To induce individuals or firms to
hold such assets, the nominal return must be reflected in capital appre-
ciation. Assume that If = Id = 1. Moreover, rd = rf = r is known with
certainty.
Appendix E summarizes the results of the three major methods of
translation. The major conclusions of the analysis are the same as for the
monetary investments: (1) the C/C method possesses both economic
interpretability and symmetry; (2) the H/H method possesses symmetry
but not economic interpretability; and (3) the H/C method possesses
neither, with the exception of the trivial case.
As in the case of monetary investments, the properties of the C/C
method are hardly surprising. Both investments will report balance sheet
amounts equal to 1 + Rd, the market value (present value) of the
investment, and both report net income of Rd, the nominal rate of return.
Again, the inclusion of the translation gain or loss is critical to both
properties. The symmetry of the H/H method is obvious, since there are
no cash flows and capital gains are not recorded. As before, the common
omissions preserve symmetry but result in the lack of economic inter-
pretability.
in balance sheet amounts that possess neither property. Moreover, since FAS No. 52 is a
hybrid method, translation gains and losses under C/C are accorded the same treatment as
those under H/C.
12 Prominent examples in this category include renewable resources (e.g., timber) or
assets which become more valuable with aging (e.g., certain beverages and tobacco). For
convenience, we shall refer to this class of assets as simply undeveloped land.
This content downloaded from 157.89.65.129 on Sun, 26 Jun 2016 00:43:14 UTC
All use subject to http://about.jstor.org/terms
538 W. H. BEAVER AND M. A. WOLFSON
(1 + )
Mft = Mdt (1 + )
the market values translated at the current exchange rates will always be
equal (i.e., MftEt = Mdt). This is to be expected since the assets are
equivalent in real terms in each period.
Appendix F summarizes the financial results reported under the various
methods for depreciable assets. The major findings of the analysis are:
(1) the C/C method possesses both economic interpretability and sym-
metry; (2) the H/H method preserves symmetry if and only if identical
depreciation methods are used;"4 and (3) the H/C method, in general,
possesses neither property.
In the special case of certainty, it is trivial to set up a predetermined
depreciation schedule so that the book value is equal to the market value
of the investment in their local currencies at each point in time. In this
special case, the H/C method becomes equivalent to the C/C method
and possesses its properties. In a similar vein, under certainty, it is also
trivial to set up a depreciation schedule for the foreign investment such
that the translated book value will be equal to its market value denomi-
nated in the domestic currency.15 In this case, the H/H method and the
C/C method produce equivalent results.
But in the more general setting of uncertainty, no predetermined
depreciation schedule can be set up to ensure the equality of book values
and market values. Hence, the major results above occur in the more
general case. And again, the inclusion of the translation gain or loss must
be incorporated in order to preserve the two properties of interest.16
13
(1 + jf)S
= (1 if) + Mi t
14 Depreciation methods are identical if and only if Dft/If = Ddt/Id for each t, where
Dft (Ddt) is the depreciation recorded at time t in the local currencies.
15 In this case, the book value of the asset denominated in the foreign currency will not
equal its market value. However, translating this "incorrect" amount by the historical,
rather than the current, exchange rate will produce a translated amount equal to the current
market value of the asset denominated in the domestic currency. Sometimes "two wrongs
do make a right." From the perspective of the income statement, the translated depreciation
amount will differ from that reported under the C/C method by exactly the amount of the
translation gain or loss (which is not reported under the H/H method). These two offsetting
differences produce the same net income under H/H as under the C/C method.
" As in the case of monetary investments, the H/C method possesses symmetry in net
income, excluding the gain or loss, for both developed and undeveloped land. However, this
property fails in the case of depreciable investments.
This content downloaded from 157.89.65.129 on Sun, 26 Jun 2016 00:43:14 UTC
All use subject to http://about.jstor.org/terms
CURRENCY TRANSLATION AND CHANGING PRICES 539
4. Empirical Implications
In a related vein, the model may be perceived to be more appropriate for some
currencies than others. The research design could reflect these priors.
18 This is not to say that the model would be appropriate for any phenomenon of interest
(e.g., explaining hedging behavior by corporate management). However, it may be helpful
for some phenomena of interest (e.g., security price behavior).
19 Careful thought is required here, because the "measurement error" may be both cross-
sectionally and cross-temporally correlated. In addition, its mean may differ from zero.
This content downloaded from 157.89.65.129 on Sun, 26 Jun 2016 00:43:14 UTC
All use subject to http://about.jstor.org/terms
540 W. H. BEAVER AND M. A. WOLFSON
20 Still another route is to assume that product and factor markets are imperfect but that
foreign exchange and financial capital markets are perfect. This appears to be the spirit of
several analyses in the international finance and economics literature (see Flood [1982] for
references). This would not require the real rate of interest to be identical in any two
countries.
This content downloaded from 157.89.65.129 on Sun, 26 Jun 2016 00:43:14 UTC
All use subject to http://about.jstor.org/terms
CURRENCY TRANSLATION AND CHANGING PRICES 541
which may have accompanied the adoption of FAS No. 8 and which may
accompany any changes to FAS No. 8. For example, with the introduction
of certain market imperfections, purchasing power parity, which we have
relied on extensively in the previous sections, may no longer be expected
to hold (see Officer [1976] for a recent review of empirical evidence).2"
Differences in tax laws across countries may lead to preferences for
borrowing in one country over another. Differential tax treatment of
hedging-related gains and losses may also encourage or discourage hedg-
ing behavior (Chown and Finney [1977]). Differences in information due
to costly observation might very well render local financing of foreign
investments less costly when the investments serve as collateral for the
loans.
21 See Gjesdal [1981] for an analysis of foreign currency translation where deviations
from purchasing power parity are introduced exogenously.
REFERENCES
ALIBER, R., AND C. STICKNEY. "Accounting Measures of Foreign Exchange Exposure: The
Long and Short of It." The Accounting Review (January 1975): 44-57.
ARROW, K. "The Role of Securities in the Optimal Allocation of Risk-Bearing." Review of
Economic Studies (1963): 91-96.
BEAVER, W. "Accounting for Inflation in an Efficient Market." In The Impact of Inflation
on Accounting: A Global View. The International Journal of Accounting, pp. 21-42.
Urbana: University of Illinois, 1979.
, AND J. DEMSKI. "The Nature of Income Measurement." The Accounting Review
(January 1979).
CHOWN, J., AND M. FINNEY. Foreign Currency Debt Management. New York: J. F. Chown
and Co., 1977.
FEIGER, G., AND B. JACQUILLAT. International Finance. Boston: Allyn and Bacon, 1981.
FINANCIAL ACCOUNTING STANDARDS BOARD. Standard No. 52: Foreign Currency Trans-
lation. Stamford, Conn.: FASB, 1981.
FLOOD, E. "The Effect of Exchange Rate Changes on the Competitive Firm's Pricing and
Output." Working paper, Massachusetts Institute of Technology, 1982.
GJESDAL, F. "Valuation of Assets Denominated in Foreign Currencies." Working paper,
Norwegian School of Economics and Business Administration, 1981.
GRAUER, F., AND R. LITZENBERGER. "The Pricing of Commodity Futures Contracts,
Nominal Bonds, and Other Risky Assets under Commodity Price Uncertainty." Journal
of Finance (March 1979): 69-83.
JENSEN, M., AND W. MECKLING. "Theory of the Firm: Managerial Behavior, Agency Costs
and Ownership Structure." Journal of Financial Economics (October 1976): 305-60.
NOBES, C. "A Review of the Translation Debate." Accounting and Business Research
(Autumn 1980): 421-31.
OFFICER, L. "The Purchasing-Power-Parity Theory of Exchange Rates: A Review Article."
International Monetary Fund Staff Papers (March 1976): 1-60.
SEIDLER, L., AND P. MCCONNELL. "FASB Statement No. 52 on Foreign Currency Trans-
lation: A First Look." Financial Analyst Journal (January/February 1982): 18-20.
This content downloaded from 157.89.65.129 on Sun, 26 Jun 2016 00:43:14 UTC
All use subject to http://about.jstor.org/terms
542 W. H. BEAVER AND M. A. WOLFSON
APPENDIX A
I. Notation
Et = the exchange rate at time t expressed as a ratio of one unit
of the domestic currency to one unit of the foreign currency
d = subscript denoting domestic
f = subscript denoting foreign
id (if) =ex post inflation rate in the domestic (foreign) economy
from t = 0 to t = 1
Id (If) =amount of initial investment in the domestic (foreign)
economy (i.e., at t = 0) denominated in the local currency
rd (rf) =ex post real rate of return on the domestic (foreign) in-
vestment from t = 0 to t = 1
Rd (Rf) = ex post nominal rate of return on the domestic (foreign)
investment from t = 0 to t = 1
f Rd = ex post nominal return from t = 0 to t = 1 on a domestic
investment whose ex post real return is equal to rf, the real
rate of return on foreign investment
Cd (Cf) = cash flow on domestic (foreign) investment at t = 1
Md (Mf) = end-of-period market value of domestic (foreign) invest-
ment (i.e., at t = 1)
Dd (Df) = historical cost depreciation on domestic (foreign) invest-
ment from t = 0 to t = 1
II. Assumptions
Al Markets are perfect and complete
A2 Without loss of generality, Eo = 1
A3 Without loss of generality, If = Id= 1
A4 Events, inflation, exchange rate changes, and cash flows occur at
discrete intervals t = O 1, . .. , T
A5 Monetary investments are "riskless" in nominal terms (i.e., Rf
and Rd are known with certainty at t = 0, although rf and rd may
be uncertain)
A6 Nonmonetary items are riskless in real terms (i.e., rf and rd are
known with certainty at t = 0, although Rf and Rd may be
uncertain)
III. Relationships
RI (1 + if)(1 + rf) 1 + Rf
R2 (1 + id)(1 + rd) I + Rd
R3 (I + id)(l + rf) I + fRd
R4* E1 = 1 + id
1 + if
* R4 is an equilibrium condition of the world assumed in Al. If R4 did not hold, arbitrage
profit opportunities would exist.
This content downloaded from 157.89.65.129 on Sun, 26 Jun 2016 00:43:14 UTC
All use subject to http://about.jstor.org/terms
CURRENCY TRANSLATION AND CHANGING PRICES 543
a + ~~~
n +Y+
; _ +
Q 1~~~~~~~~~~~~~~~
*QQ ++
+ + II-
n~~~~~~~~c cn
Ss ~ ~~~~~ H
s 219 - 0 S I +
0 n I
X 0
0 cn 0
i,~~~~~ H
d,. cn R4i<4
~~~~~ 0~~~~~c
H~~~~~~~~-
This content downloaded from 157.89.65.129 on Sun, 26 Jun 2016 00:43:14 UTC
All use subject to http://about.jstor.org/terms
544 W. H. BEAVER AND M. A. WOLFSON
4,D
+ +
Can
.o+ + a. aA
>
0; 0 + + 2~
0~~~~~~~~~~~~~~~~~~0 c
X = +~~~~~~~~~~~~~~~~
4-D ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ c-
0 41~
~~ -~~~-D
~ ~ ~ ~~~~E*~~~~cI~~~*
4-D Z5 4-D r2* ~~~~+
-~ + C
,~~~~~ .~~~~~~~ ~~~~ ~ ~ ~ ~ ~ ~~~c
i ? O
W ==Q
W t 0
W++
0 Q~~~~~~~-
This content downloaded from 157.89.65.129 on Sun, 26 Jun 2016 00:43:14 UTC
All use subject to http://about.jstor.org/terms
CURRENCY TRANSLATION AND CHANGING PRICES 545
t Q ~~~~~~11 11
-~ ~~~~ Q It
11 o rfli
o +
11 N +-
cn~
0
4-D~II
+ p-
o s
;T..4 ~ ~ ~ I I
z ~ c rn
;-49 g*
rA4:z
7:
rn 4 S p
Q cnQ 0
4-D ~ ~ - .
a) 4-~~~~~~w -Q4
4-D a) 0 )-~C cC
ccn
P 4 Q Z H
This content downloaded from 157.89.65.129 on Sun, 26 Jun 2016 00:43:14 UTC
All use subject to http://about.jstor.org/terms
546 W. H. BEAVER AND M. A. WOLFSON
a)
a)
+~~~~~~~~
o; =
rm 4
o V
D -I
_, a . ~ a , 4,A t 'X
Pz 0 P EXE
This content downloaded from 157.89.65.129 on Sun, 26 Jun 2016 00:43:14 UTC
All use subject to http://about.jstor.org/terms
CURRENCY TRANSLATION AND CHANGING PRICES 547
o -
a)) +
+
'? " '--t1 II
so +
z - + +
so Zo
X) -, C
g S Xo = r =0
= O = S U -O
This content downloaded from 157.89.65.129 on Sun, 26 Jun 2016 00:43:14 UTC
All use subject to http://about.jstor.org/terms
548 W. H. BEAVER AND M. A. WOLFSON
a)
> >
ct
>~~~~~~ C t
,D ~ -q ~-q o o o o 4 ~ ~ o ~
o- Ei
o~~~~ ++
O~~~~C , ,-C~ c
cn~-
?5~~~~4- ?t ct t W
Q)o=EH?
- b 0cc :t4 b= ~3
0000 -: 0-Y S > : Q
; X H = = m ; X H = = m~~~~~~rj
?je ct ct)=Q
oQPE
This content downloaded from 157.89.65.129 on Sun, 26 Jun 2016 00:43:14 UTC
All use subject to http://about.jstor.org/terms
CURRENCY TRANSLATION AND CHANGING PRICES 549
_ +S
>>
Q , H
+~~~+
= * ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~a )
ao II +e 0
~~~-~~~~~'--~~~~~~~~~ + 7 -~~~~~~~~~~~-4 -
II cn c
So t~~~~~~~~~~~~~~~~~~~~~~c
a) L J ~ ~ ~ ~ ~ ~ ~ ~ ~c
4~~~~~~
4i ?- , - X 4 X E
a)~~~~~~~~~~~~~
>~~~~~~~~~~~~~
Q~~~~~~~c
This content downloaded from 157.89.65.129 on Sun, 26 Jun 2016 00:43:14 UTC
All use subject to http://about.jstor.org/terms
550 W. H. BEAVER AND M. A. WOLFSON
-4-)
q .+
a C
+ +
X~~~~ I I
++~~~
.- +~~~~~~~~~~~~~~~~~~~~~~~~~
+|+ ~ ~~ + + a II _ ~~~
-- ++~~~~~~
++ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
.. 0
>
- 0~~~~~~~~~~~~~~~~~~~~c
a)~~~~~~~~~~~~~~4- >t
ct ct~~~~~~
ct 4-5 c 0 0 q ol .5
A -~~~~~~~ Q - -- C-
ct ct E-1
>
E--l~~.
0
c-q ~
ct~~~~~~~~~~~~~~~~~~
-qH
ctzOkc
E-1 E-4 ~ ~ ~ a s
This content downloaded from 157.89.65.129 on Sun, 26 Jun 2016 00:43:14 UTC
All use subject to http://about.jstor.org/terms