The facts that individual currency standard deviation is usually 5% to 15 % and that the standard deviation for other commodities used by a firm is usually much larger indicates that:
A)currency risks are the most important risk that any firm faces.
B)risks exist no matter what a firm does and efforts to reduce risks are generally ineffective.
C)currency risks are not as important to a firm as commodity price risks.
D)standard deviation is not a proper measure of risks faced by a firm.

Question

Quizplus · Accepted Answer

The fact that standard deviations for other commodities used by the firm are usually much larger than individual currency standard deviation indicates that currency risks are not as important to a firm as commodity price risks. This suggests that efforts to reduce currency risks may not be as necessary or effective as efforts to reduce risks related to commodity prices. However, it is important to note that there are other factors to consider when assessing risks faced by a firm, and standard deviation may not be the only or most appropriate measure of risk.

The Facts That Individual Currency Standard Deviation Is Usually 5