22. Consider an MNC that is exposed to the Taiwan dollar (TWD) and the Egyptian pound (EGP). 25% of the MNC's funds are Taiwan dollars and 75% are pounds. The standard deviation of exchange movements is 7% for Taiwan dollars and 5% for pounds. The correlation coefficient between movements in the value of the Taiwan dollar and the pound is .7. Based on this information, the standard deviation of this two-currency portfolio is approximately: a. 5.13%. b. 2.63%. C. 4.33%. d. 5.55%. 23. Two highly negatively correlated currencies move in tandem almost as if they are the same currency a. True b. False 24. Vada, Inc. exports computers to Australia invoiced in U.S. dollars. Its main competitor is located in Japan. Vada is subject to: a. economic exposure b. transaction exposure c. translation exposure d. economic and transaction exposure 25. Generally, MNCs with less foreign revenues than foreign costs will be foreign currency a. favorably stronger b. favorably; weaker c. not; stronger d. not; weaker affected by a 26. Currency correlations are generally negative a. True b. False 27. Assume the following information U.S. deposit rate for 1 year U.S. borrowing rate for 1 year Swiss deposit rate for 1 year Swiss borrowing rate for 1 year Swiss forward rate for 1 year 11% 12% 8% 10% $.40