Question: Suppose that the standard deviation of the return on Nestl e
Suppose that the standard deviation of the return on Nestl´e, a Swiss firm, in terms of Swiss francs is 19% and the standard deviation of the rate of change in the dollar franc exchange rate is 15%. In addition, the estimated correlation between the Swiss franc return on Nestl´e and the rate of change in the exchange rate is 0.17. Given these figures, what is the standard deviation of the dollar rate of return on investing in Nestl´e stock?
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