Which of the following conclusions are correct?
A) Most of the volatility of the dollar value of the Israeli asset can be removed by hedging exchange risk because b2[Var(S) ] and Var(e) are 236,717 ($) 2 and 493,751 ($) 2 respectively.
B) Most of the volatility of the dollar value of the Israeli asset cannot be removed by hedging exchange risk because b2[Var(S) ] and Var(e) are 236,717 ($) 2 and 493,751 ($) 2 respectively.
C) Most of the volatility of the dollar value of the Israeli asset cannot be removed by hedging exchange risk because b2[Var(S) ] and Var(e) are 8.22 ($) 2 and 59,211 ($) 2, respectively.
D) Most of the volatility of the dollar value of the Israeli asset can be removed by hedging exchange risk because b2[Var(S) ] and Var(e) are 8.22 ($) 2 and 59,211 ($) 2 respectively.
Correct Answer:
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