. Find the month-end exchange rates between MXP and USS from Bloomberg and fill
ID: 2808484 • Letter: #
Question
. Find the month-end exchange rates between MXP and USS from Bloomberg and fill in the blanks in the following table. a. For the year 2014 uss per DateMXP Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jul-14 Aug-14 Sep-14 Nov-14 b. For the year 2017 Date USs per Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 2. Then, compute the standard deviation of the percent changes for each of the two periods. Which period is more volatile? What political, economic or financial factors made one period more volatile than the other period?Explanation / Answer
Month End 2014 2017
Jan 19.14 20.83
Feb 13.22 20.00
Mar 13.06 18.84
Apr 13.09 18.82
May 12.86 18.65
Jun 12.07 18.08
July 13.23 17.87
Aug 13.08 17.79
Sept 13.43 18.26
Oct 13.49 19.14
Nov 13.93 18.64
Dec 14.74 19.74
Average of 2014 Exchange Rates is = 13.85 ------------------------ (A)
Average of 2017 Exchange Rates is = 19.03 ------------------------(A1)
Standard Deviation of 2014 exchange rates = 1.74 ----------------- (B)
Standard Deviation of 2017 exchange rates = 0.92 ----------------- (B1)
= 1.74 / 13.85 8 * 100
= 12.59
=0.92 / 19.03 * 100
= 4.81
Volatality :
A stock volatality is the variation in its price over a period of time. To present this volatality in annualized terms, we simply need to multiply our daily standard deviation by the square root of 252. This assumes there are 252 Trading days in the given year.
= 15.974 * 1.74
= 27.80
= 14.70
Therefore Compared to 2017 year, the volatality is more in the year of 2014.
Factors Affecting Volatality :-
1.Production & Incomplete Information
2. Time Varying Expected Results.
3.Uncertanity & Irreversable Investments.
4. Procyclicality
5.Behavioral baisis
6.Political Instabilty
7. Political Interfiance in Large investment decisions.
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