The Degree of Volatility of Financing with a Currency Portfolio

question 38

True/False

The degree of volatility of financing with a currency portfolio depends on only the standard deviations of effective financing rates of the individual currencies within the portfolio.

---

Definitions:

Cashier's Check

A check issued by a bank, drawn on its own funds rather than that of an account holder, and commonly used to guarantee payment.

Certified Check

A check verified by a bank, guaranteeing that the writer of the check has enough funds available for the transaction.

Drawee

The party in a financial transaction who is directed to pay a certain amount of money as outlined in a draft or check.

Draft

A preliminary version of a document or plan that is subject to revision.