Suppose that the daily volatility of the FTSE 100 stock index (measured in pounds sterling) is 1.8%

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Suppose that the daily volatility of the FTSE 100 stock index (measured in pounds sterling) is 1.8% and the daily volatility of the USD-GBP exchange rate is 0.9%. Suppose further that the correlation between the FTSE 100 and the USD-GBP exchange rate is

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