5. Consider the following direct exchange rates for the euro (EUR) and Japanese yen (JPY)...
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5. Consider the following direct exchange rates for the euro (EUR) and Japanese yen (JPY) over the past 13 months: End of Month EUR/USD JPY/USD September, 2020 1.1677 0.009564 October, 2020 1.1971 0.009608 November, 2020 1.2300 0.009697 December, 2020 1.2139 0.009553 January, 2021 1.2074 0.009387 February, 2021 1.1724 0.009066 March, 2021 1.2127 0.009182 April, 2021 1.2190 0.009099 May, 2021 1.1902 0.009047 June, 2021 1.1868 0.009118 July, 2021 1. 1797 0.009096 August, 2021 1.1602 0.008934 September, 2021 1.1574 0.008972 Compute the exchange rate risk as measured by the standard deviation of monthly returns for a company that has half its net cash flows in euros and half its net cash flows in Japanese yen (both are inflows)
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