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Adler and Simon (1986)examined the Exposure of a Sample of Foreign

Question 89

Multiple Choice

Adler and Simon (1986) examined the exposure of a sample of foreign equity and bond index returns to exchange rate changes.They found that

A) changes in exchange rates generally explained a smaller portion of the variability of foreign bond indexes than foreign equity indexes.
B) changes in exchange rates generally explained none of the variability of foreign bond indexes but completely explained the variability in foreign equity indexes.
C) changes in exchange rates generally explained a larger portion of the variability of foreign equity indexes than foreign bond indexes.
D) changes in exchange rates generally explained a larger portion of the variability of foreign bond indexes than foreign equity indexes.

Correct Answer: