Purchase Solution

Standard Deviation and Foreign Exchange

Not what you're looking for?

Ask Custom Question

Need help with understanding each of these questions.

The standard deviation statistic measures the degree of movement for EACH currency. Is this true or false. I know SD statistic measures currency variability but not sure for each currency.

A spot foreign exchange transaction does not take place at a specific future date? True or false

Explain and list two or three operational or financial measures that a MNC can take in order to minimize the political risk associated with a foreign investment project.

Purchase this Solution
Solution Summary

The solution determines the standard deviation and foreign exchange.

Solution Preview

Answer:
1. True
2. True
3. We have the following operational or financial measures that a MNC can take in order to minimize the political risk associated with a foreign investment project:
Use of experts to find out the level of ...

Solution provided by:
Jayant Kumar, MBA
Education
  • MBA, Indian Institute of Finance
  • Bsc, Madras University
Recent Feedback
  • "I've posted a similar question for another course. It's post 657940, and it's a practice problem that I'd like to use for the final exam. Your help will be greatly appreciated. "
  • "thank you!"
  • "Thank you again Jayant. You are super fast. "
  • "Thank you Jayant. You are appreciated. "
  • "Again, thank you Jayant. You are wonderful. "
Purchase this Solution
Free BrainMass Quizzes
Academic Reading and Writing: Critical Thinking

Importance of Critical Thinking

Six Sigma for Process Improvement

A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.

Team Development Strategies

This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.

Understanding the Accounting Equation

These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.

Motivation

This tests some key elements of major motivation theories.

View More Free Quizzes
Related BrainMass Solutions

  • Using the z-score to calculate the probability

    A portfolio manager believes that tomorrow's foreign exchange rate of German marks per US dollar will be Normally distributed with mean 2.03 and standard deviation 0.08.

  • Risk of Finance, Portfolio, Investments

    There can be protection against foreign exchange risk by purchasing forward contracts for foreign exchange. 2.

  • Foreign Country Funds and Diversification

    What happens to the portfolio standard deviation as the investor substitutes the foreign securities for the U.S. securities? What combination of U.S. and Japanese stocks and U.S. and Brazilian stocks minimize risks? 2.

  • Practice problems Need help

    Risk-free rate of interest 3.5% Average equity market return 10.5% Estimated cost of debt 8.0% Estimated correlation of Gibson with the market 0.726 Estimated standard deviation of Gibson's returns 35% Estimated standard deviation of the market's

  • Considerations for entering foreign markets

    Assumptions JP Morgan Morgan Stanley Components of beta: Β Estimate of correlation between security and market ρjm             0.75              0.80 Estimate of standard deviation of Vale's returns σj 40.00% 35.00% Estimate of standard

  • Value of a Call Option using Black Scholes Equation

    Assume that the spot price of the British pound is $1.55, the annualized 30-day sterling interest rate is 10%, the annualized 30-day U.S. interest rate is 8.5%, and the annualized standard deviation of the dollar:pound exchange rate is 17%.

  • Higher standard deviation in cash flows and associated risks

    139065 Higher standard deviation in cash flows and associated risks Explain how unexpected national and/or international events can create a higher standard deviation in cash flows and increase the risk associated with long-lived projects.

  • dominant strategy in game theory

    Two projects have the following NPV's and standard deviations: Project A Project B NPV 200 300 Standard deviation 75 100

  • gold standard and forex market

    224993 Foreign Exchange Markets Summary Consider the following: You have been asked by a local college to write a lecture that explains the gold standard and addresses the functions of the world's major exchange markets.

View More Related Solutions