Question
A U.S. firm holds an asset in France and faces the following scenario: State 1 State 2 State 3 State 4 Probability 25% 25% 25%
A U.S. firm holds an asset in France and faces the following scenario:
| State 1 | State 2 | State 3 | State 4 | |
| Probability | 25% | 25% | 25% | 25% |
| Spot rate | $1.29/ | $1.22/ | $1.17/ | $1.15/ |
| P * | 1700 | 1500 | 1200 | 1100 |
In the above table, P * is the euro price of the asset held by the U.S. firm. What is the variance of the spot rate (X.XXXXX)
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Fundamentals of Financial Management
Authors: Eugene F. Brigham, Joel F. Houston
Concise 6th Edition
324664559, 978-0324664553
