Which of the Following Is Not True Regarding Currency Correlations

question 36

Multiple Choice

Which of the following is not true regarding currency correlations?

• A) Two highly positively correlated currencies act almost as if they are the same currency.
• B) If two inflow currencies are highly positively correlated, transaction exposure is somewhat offset.
• C) If two inflow currencies are negatively correlated, transaction exposure is somewhat offset.
• D) If two currencies, one an inflow currency and the other an outflow currency, are highly positively correlated, transaction exposure is somewhat offset.

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Definitions:

Control Charts

Statistical tools used in quality control processes to analyze and understand process variations over time.

Upper Control Limits

The threshold values in statistical quality control that indicate the maximum acceptable variation in a process.

Pareto Analysis

A decision-making technique used for selecting a limited number of tasks that produce significant overall effect, based on the principle that 80% of effects come from 20% of causes.

Vital Few

A principle often associated with the Pareto Principle, indicating that a small number of causes, inputs, or effort usually lead to a majority of the results, outputs, or rewards.