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

 

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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 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

Answer rating: 100% (QA)

Australia has had a few exchange rate regimes Preceding the mid 1930s Australia operated under the highest quality level The best quality level implie... View the full answer