Using this information, discuss the importance of the exchange rate risk for two different asset class, stocks and bonds. in your answer, use Australia as an example to illustrate your point

 

TITE ett U.48: Components of Var (R) Var(R) Var(R) Varle) 2Cov(R, e) AVar Bonds Australia 13.81 7.60 4.57 (33.09%) 3.47 (45.66%) 2.86 (26.07)% 1.98 (15.55%) 2.07 (16.49%) 4.17 (42.08%) 4.55 (100%) 11.20 (81.10%) 4.90 (64.47%) 9.19 (83.77%) 9.93 (78.00%) 10.82 (86.22%) 7.57 (76.39%) 0.00 (n.a.) -2.08 (-15.06%) -0.79 (-10.39%) -122 (-11.12%) 0.69 (5.42%) -0.57 (-4.54%) -2.02 (-20.38%) 0.00 (n.a.) 0.12 (0.87%) 0.02 (0.26%) 0.14 (1.28%) 0.13 (1.03%) 0.23 (1.83%) 0.19 (1.92%) 0.00 (n.a.) Canada Germany Japan Switzerland U.K. U.S. 10.97 12.73 12.55 9.91 4,55 Stocks 11.20 (29.67%) 4.90 (15.61%) 9.19 (20.67%) 9.93 (24.91%) 10.82 (44.08%) 7.57 (29.36%) 0.00 (n.a.) 10.39 (27.52%) 8.51 (27.14%) -2.54 (-5.72%) -5.07 (-12.72%) -0.20 (-0.53%) -0.31 (-0.96%) 0.21 (0.49%) 0.54 (1.35%) 024 (0.99%) 0.18 (0.70%) 0.00 (n.a.) 37.75 31.35 16.36 (43.34%) 18.25 (58.21%) 37.58 (84.56%) Australia Canada Germany Japan Switzerland U.K. U.S. 44.44 34.45 (86.46%) 20.75 (84.58%) 18.88 (73.28%) 20.27 (100%) 39.85 -727 (-29.65%) -0.86 (-3.34%) 0.00 (n.a.) 24.54 25.77 20.27