Return Decomposition: Foreign-Currency and Domestic-Currency

The domestic currency return is:

No. The returns don't build off each other, the two components of the domestic-currency return depend upon each other.

Exactly! The domestic-currency return is multiplicative, as: $$\displaystyle R_{DC}=(1+R_{FC})(1+R_{FX})-1$$

That's not it. The percent change in the spot doesn't leverage the foreign asset return.

additive or subtractive depending upon the currency and price movement returns.

multiplicative by combining the foreign currency return and the percent change in the foreign currency versus the domestic currency.

leveraged by taking the foreign currency return divided by the percent change in the spot exchange rate between the currency pair.