Consider an MNC That Is Exposed to the Bulgarian Lev

question 63

Multiple Choice

Consider an MNC that is exposed to the Bulgarian lev (BGL) and the Romanian leu (ROL) . 30% of the MNC's funds are lev and 70% are leu. The standard deviation of exchange movements is 10% for lev and 15% for leu. The correlation coefficient between movements in the value of the lev and the leu is .85. Based on this information, the standard deviation of this two-currency portfolio is approximately:

• A) 17.28%.
• B) 13.15%.
• C) 14.50%.
• D) 12.04%.

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Definitions:

Delegate Task

The act of assigning responsibilities or duties to someone else, often to manage time and resources more effectively.

External Rotation

Movement of a limb or body part away from the midline, rotating externally around its axis.

Shoulder Movement

The action or process of moving the shoulder, involving various muscle groups and allowing a wide range of motion in multiple directions.

Full Circle

Coming back to the original position, situation, or viewpoint after a series of changes or events.