If a Firm Repeatedly Borrows a Foreign Currency Portfolio, the Variability

question 4

Multiple Choice

If a firm repeatedly borrows a foreign currency portfolio, the variability of the portfolio's effective financing rate will be highest if the correlations between currencies in the portfolio are ____ and the individual variability of each currency is ____.

• A) high; low
• B) high; high
• C) low; low
• D) low; high

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