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 o) -$2,313.98. O-$2,983.04. -$3,760.42. -$3,186.80. O-$7,536.24.

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 o) -$2,313.98. O-$2,983.04. -$3,760.42. -$3,186.80. O-$7,536.24.

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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