Assume you want to determine whether the monthly movements in the Polish zloty against the dollar are more volatile than the monthly movements in some other currencies against the dollar. The zloty was valued at $0.5102 on May 1, $0.5209 on June 1, $0.5888 on July 1, $0.5406 on August 1, and $0.5260 on September 1. Compute the standard deviation (a measure of volatility) of the zloty's monthly exchange rate movements. O 6.21% O 9.02% O 1.06% O 1.76% O None of the above is correct.

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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.