Multiple Choice
Consider an MNC that is exposed to the Bulgarian lev (BGL) and the Romanian leu (ROL) ; 30 percent of the MNC's funds are lev and 70 percent are leu. The standard deviation of exchange movements is 10 percent for lev and 15 percent for leu. The correlation coefficient between movements in the value of the lev and the leu is .85. Based on this information, the standard deviation of this two-currency portfolio is approximately:
A) 17.28 percent.
B) 13.15 percent.
C) 14.50 percent.
D) 12.04 percent.
Correct Answer:
Verified
Correct Answer:
Verified
Q39: If a U.S. firm's sales in Australia
Q40: Translation exposure reflects:<br>A) the exposure of a
Q41: A firm produces products for which substitute
Q42: The _ the percentage of an MNC's
Q43: Which of the following operations benefits from
Q45: Economic exposure can affect:<br>A) MNCs only.<br>B) purely
Q46: Treck Co. expects to pay €200,000 in
Q47: If the U.S. dollar appreciates, an MNC's:<br>A)
Q48: Economic exposure refers to:<br>A) the exposure of
Q49: The Canadian dollar's volatility has changed over