The return on the Agnes Corporation in the state of recession is estimated to be -23% and the return on Agnes in the state of boom is estimated to be 35%. The return on the Cameron Corporation in the state of recession is estimated to be 40% and the return on Cameron in the state of boom is estimated to be -19%. Given this information, what is the covariance between Agnes and Cameron if there is a 0.45 probability that the economy will be in the state of boom and a 0.55 probability that the economy will be in the state of recession. 0.4198 0.0827 0.0580 -0.0864 -0.0847

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Exchange Rate Risk

It is the possibility that the value of a currency will fluctuate in the future. In the wake of globalization, business establishments have increasingly ventured into international markets. The volume of international trade has prospered excellently in the near past and is expected to be more affluent in the future. The use of exchange-traded derivative financial instruments has been multi-folded to provide for the requirements of various MNCs and offshore potential investors. Most banks and financial institutions have helped integrate the global economies. Our Government has introduced some bold and extreme measures to fulfil the purpose behind the fiscal, industrial, and monetary policies. The enactment of GST is a huge step towards streamlining the taxation system of the country. Owing to Covid-19, this aspect of corporate risk management has become critical.