Suppose that the daily volatility of the FTSE 100 stock index (measured in pounds sterling) is 1.3% and the daily volatility of the dollar sterling exchange cate is 0.9% Suppose further that the correlation between the FTSE 100 and the dolar sterling exchange rate is 0.4. What is the volatility of the FTSE 100 when it is translated to US dollars? Assume that the dollan'stering exchange rate is expressed as the number of US dollars per pound sterling. (Her: When Z-XY, the percentage daily change in Zis approximately equal to the percentage daily change in X plus the percentage daily change in Y) 19.13, Suppose that in Problem 19.12 the correlation between the S&P 500 Index (measured in dollars) and the FTSE 100 Index (measured in sterling) is 0.7, the correlation between the S&P 500 Index (measured in dollars) and the dollar sterling exchange rate is 0.3, and the daily volatility of the S&P 500 index is 1.6%. What is the correlation between the S&P 500 index (measured in dollars) and the FTSE 100 index when it is translated to dollars? (Hir: For three variables X, Y, and Z, the covariance between X + Y and Z equals the covariance between X and Z ples the covariance between Y and Z.)