The use of standard deviation as a measure of currency risk assumes that currency changes are independent.This means that:
A)a currency change is not related to the change in value of any other currency.
B)a currency change is not in the same percentage as the most recent currency change.
C)each currency change is unrelated to previous or subsequent currency changes.
D)each currency change occurs in a different time period than the prior currency change.

Question

Quizplus · Accepted Answer

Standard deviation as a measure of risk assumes that each event (in this case, currency change) is independent of others, meaning each currency change is unrelated to previous or subsequent changes, not that they are unrelated to other currencies or occur in different time periods.

The Use of Standard Deviation as a Measure of Currency