Consider an MNC That Is Exposed to the Taiwan Dollar

question 4

Multiple Choice

Consider an MNC that is exposed to the Taiwan dollar (TWD) and the Egyptian pound (EGP) . 25% of the MNC's funds are Taiwan dollars and 75% are pounds. The standard deviation of exchange movements is 7% for Taiwan dollars and 5% for pounds. The correlation coefficient between movements in the value of the Taiwan dollar and the pound is .7. Based on this information, the standard deviation of this two-currency portfolio is approximately:

• A) 5.13%.
• B) 2.63%.
• C) 4.33%.
• D) 5.55%.

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Definitions:

Nondirective Therapy

A form of psychotherapy in which the therapist refrains from giving advice or interpretation, allowing the client to lead the direction of the therapy.

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A psychotherapeutic approach developed by Carl Rogers, emphasizing an empathetic, accepting, and non-judgmental environment to facilitate a client's growth and self-discovery.

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