Lubbock Co. expects to pay 180,000 in one month for its imports from France. It...
90.2K
Verified Solution
Link Copied!
Question
Finance
Lubbock Co. expects to pay 180,000 in one month for its imports from France. It also expects to receive 220,000 for its exports to Belgium in one month. Lubbock estimates the standard deviation of monthly percentage changes of the euro to be 4.5 percent over the last 50 months. Assume that these percentage changes are normally distributed. Using the value-at-risk (VAR)method based on a 99% confidence level, what is the maximum one month loss in dollars if the expected percentage change of the euro during next month is 2.5%? Assume that current spot rate of the euro (before considering the maximum one-month loss) is $1.18 per euro. (95% confidence interval is 1.645 o. 97.5% confidence interval is 1.960, and 99% confidence interval is 2.326 0) -$2,313.98. 0-$2,983.04. -$3,760.42 -$3,186.80. O-$7,536.24
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
- Unlimited Question Access with detailed Answers
- Zin AI - 3 Million Words
- 10 Dall-E 3 Images
- 20 Plot Generations
- Conversation with Dialogue Memory
- No Ads, Ever!
- Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Other questions asked by students
StudyZin's Question Purchase
1 Answer
$0.99
(Save $1 )
One time Pay
- No Ads
- Answer to 1 Question
- Get free Zin AI - 50 Thousand Words per Month
Best
Unlimited
$4.99*
(Save $5 )
Billed Monthly
- No Ads
- Answers to Unlimited Questions
- Get free Zin AI - 3 Million Words per Month
*First month only
Free
$0
- Get this answer for free!
- Sign up now to unlock the answer instantly
You can see the logs in the Dashboard.