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The following table provides a breakdown of the volatility faced by a U.S. trader investing...

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Accounting

The following table provides a breakdown of the volatility faced by a U.S. trader investing investing in a German bond. What percentage of the total return volatility is explained by the volatility in the $/ exchange market?

Var(Ri$) Var(Ri) Var(ei) 2Cov(Ri,ei) DVar
12.73 1.98 9.93 0.69 0.13

15.55%

5.42%

78.00%

1.02%

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