Exhibit 21-1 To Benefit from the Low Correlation Between the Trinidad Dollar

question 32

Multiple Choice

Exhibit 21-1
To benefit from the low correlation between the Trinidad dollar and the Japanese yen (¥) , Sciorra Corporation decides to invest 50 percent of total funds invested in Trinidad dollars and the remainder in yen. The domestic yield on a one-year deposit is 8 percent. The Trinidad one-year interest rate is 10 percent, and the Japanese one-year interest rate is 7 percent. Sciorra has determined the following possible percentage changes in the two individual currencies as follows:
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-Refer to Exhibit 21-1 above. What is the probability that the yield of the two-currency portfolio is less than the domestic yield?​

• A).1575
• B).35
• C).6425
• D)1
• E)none of the above