Question
4. Bank of Southern Vermont has determined that its inventory of 20 million euros () and 25 million British pounds () is subject to market
4. Bank of Southern Vermont has determined that its inventory of 20 million euros () and 25 million British pounds () is subject to market risk. The spot exchange rates are $0.40/ and $1.28/, respectively. The s of the spot exchange rates of the and , based on the daily changes of spot rates over the past six months, are 65 bp and 45 bp, respectively. Use adverse rate changes in the 90% confidence interval (critical value = 1.65 for 90% confidence interval).
Question: What is the DEAR of euros ()?
5. Bank of Southern Vermont has determined that its inventory of 20 million euros () and 25 million British pounds () is subject to market risk. The spot exchange rates are $0.40/ and $1.28/, respectively. The s of the spot exchange rates of the and , based on the daily changes of spot rates over the past six months, are 65 bp and 45 bp, respectively. Use adverse rate changes in the 90% confidence interval (critical value = 1.65 for 90% confidence interval).
Question:What is the DEAR of British pounds ()?
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Contemporary Financial Management
Authors: R. Charles Moyer, William J. Kretlow, James R. Mcguigan
8th Edition
0324065914, 9780324065916
