The Return and Variance of Return to a U

question 29

Multiple Choice

The return and variance of return to a U.S.dollar investor from investing in individual foreign security i are given by:

• A)R_i$ = (1 + R_i)(1 + e_i)− 1 and Var(R_i$)= Var(R_i)
• B)R_i$ = R_i + e_i and Var(R_i$)= Var(R_i)+ Var(e_i)
• C)R_i$ = (1 + R_i)(1 + e_i)- 1 and Var(R_i$)= Var(R_i)+ Var(e_i)+ 2Cov(R_i,e_i)
• D)none of the options

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Definitions:

Sympathetic

Relates to the part of the autonomic nervous system that prepares the body for intense physical activity and is often referred to as the fight-or-flight response.

Parasympathetic

Part of the autonomic nervous system responsible for relaxing the body and conserving energy.

Endocrine System

A network of glands in the body that secrete hormones directly into the circulatory system to regulate the body's growth, metabolism, and sexual development and function.

Hormones

Chemical messengers produced by glands in the body, which travel through the bloodstream to regulate various physiological processes and behaviors.