What Is the Expected Effective Financing Rate of the Portfolio

question 21

Multiple Choice

What is the expected effective financing rate of the portfolio Martha is contemplating (assume the two currencies move independently from one another)

• A) 9.03%.
• B) 7.00%.
• C) 10.00%.
• D) 7.59%.
• E) none of the above

---

Definitions:

Fixed Costs

Expenses that do not change with the volume of production or sales, such as rent, salaries, and insurance.