Question 37 2 pts Volusia, Inc. is a U.S.-based exporting firm that expects to receive payments denominated in both euros and Canadian dollars in one month. Based on today's spot rates, the dollar value of the funds to be received is estimated at $600,000 for the Euros and $400,000 for the Canadian dollars. Based on data for the last fifty months, Volusia estimates the standard deviation of monthly percentage changes to be 6 percent for the euro and 3 percent for the Canadian dollar. The correlation coefficient between the euro and the Canadian dollar is 0.20. Assuming an expected percentage change of O percent for each currency during the next month, what is the maximum one-month loss of the currency portfolio? Use a 95-percent confidence level and assume the monthly percentage changes for each currency are normally distributed. (Recall that 90% of a normal distribution curve is represented by 1.64 standard deviations in both directions from the mean. 95% of the distribution is represented by 1.96 standard deviations in both directions from the mean. 99% if the distribution is represented by 2.58 standard deviations in both directions from the mean.) 0 -7.87% 0 -6.58% O -6.92% 0 -5.85% 0 -9.00% Question 28 2 pts Assume the following information for a firm in the U.S. that will need 300,000 ringgit (payable) in 90 days: 90-day U.S. interest rate 3% 90-day Malaysian interest rate 4% 90-day forward rate of Malaysian ringgit $0.400 Spot rate of Malaysian ringgit $0.402 Which of the following represents the comparison of using a forward hedge versus a money market hedge? The money market hedge is roughly $560 cheaper than using the forward rate. The forward hedge is roughly $760 cheaper than using the money market hedge. The forward hedge is roughly $1,450 cheaper than using the money market hedge. The money market hedge is roughly $125 cheaper than using the forward rate