5. Consider the following direct exchange rates for the euro (EUR) and Japanese yen (JPY) over the past 13 months: End of Month EUR/USD JPY/USD September, 2020 1.1677 0.009564 October, 2020 1.1971 0.009608 November, 2020 1.2300 0.009697 December, 2020 1.2139 0.009553 January, 2021 1.2074 0.009387 February, 2021 1.1724 0.009066 March, 2021 1.2127 0.009182 April, 2021 1.2190 0.009099 May, 2021 1.1902 0.009047 June, 2021 1.1868 0.009118 July, 2021 1.1797 0.009096 August, 2021 1.1602 0.008934 September, 2021 1.1574 0.008972 Compute the exchange rate risk as measured by the standard deviation of monthly returns for a company that has half its net cash flows in euros and half its net cash flows in Japanese yen (both are inflows). 6. Assume that the current spot rate on the Brazilian real (BRL) is $0.18USD and that the 90-day forward premium for the BRL is 6% (annualized). If your company wants to hedge a 2,000,000BRL payable due in 180 days using a forward contract, how much will it pay in USD in 180 days? 7. Assume the following: Your firm is expecting a net receivable from Singapore of 10,000,000SGD one year from now Current Singaporean dollar (SGD) spot rate is $0.74USD Your firm can borrow money in the U.S. for 1-year at 4% Your firm can borrow money in Singapore (in SGD) for 1-year at 5% Your firm can earn 1% on 1-year USD deposits Your firm can earn 2% on 1-year SGD deposits How much will your firm receive in USD if it employs a money market hedge