9. The Swiss had abandoned their currency peg, people had lost money; and VaR(value at risk) was being blamed. Since the Swiss franc's daily movements since 2011 had been artificially low, the maximum predicted losses would have been negligible predicted by the investors. But their loss was huge. This is due to VAR uses....... to predict maximum one day loss. Option: current volatility future volatility past volatility implied volatility 10. The spot rate is AS$2 per US dollar. The annual interest rates are 12 percent for the United States and 8 percent for Australia. If these interest rates remain constant, then what is the US dollar market forecast of the spot rate for the Australian dollar? Option: A$ 2.074 A$ 1.928 A$ 0.315 A$ 2 11. MNC A uses a regression model to forecast the value of the euro in the upcoming period. The following regression model was developed: t = b0 + b1INFt-1 + b2INCt-1, where the two variables are the percentage change in the inflation differential between the U.S. and Europe and the quarterly percentage change in the income growth differential between the U.S. and Europe, respectively. The coefficients for the regression model are: b0 = 0.005, b1 = 0.9, and b2 = 0.7. In the most recent quarterly, U.S. inflation increased by 1%, while European inflation increased by 2%. Also in the most recent quarter, U.S. income growth increased by 1.5%, while European income growth increased by 2%. Based on this information, what is the expected change in the euro? Option: 0.75% appreciation 0.75% depreciation 1.05% appreciation 0.05% depreciation