Exhibit 20-3
Cameron Corporation Would Like to Simultaneously Borrow Japanese

question 6

Multiple Choice

Exhibit 20-3
Cameron Corporation would like to simultaneously borrow Japanese yen (¥) and Sudanese dinar (SDD) for a six-month period. Cameron would like to determine the expected financing rate and the variance of a portfolio consisting of 30% yen and 70% dinar. Cameron has gathered the following information:
$\begin{array}{c}\begin{array}{lll}\text {Mean effective financing rate of Japanese yen for six months}\\\text { Mean effective financing rate of Sudanese dinar for six months }\\\text {Standard deviation of Japanese yen's effective financing rate }\\\text {Standard deviation of Sudanese dinar's effective financing rat}\\\text { Correlation coefficient of effective financing rates of these two currencies} \end{array}\begin{array}{c}4 \% \\1 \% \\.10 \\.20 \\.23 \end{array}\end{array}$

-Refer to Exhibit 20-3. What is the expected financing rate of the portfolio contemplated by Cameron Corporation?

• A)3.10%.
• B)1.90%.
• C)17.00%.
• D)13.00%.
• E)none of the above

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Definitions:

Romanesque Cloisters

The covered walkways surrounding a courtyard in Romanesque architecture, typically found in monastic buildings from the medieval period.

Romanesque Reliefs

Sculptural works found in Romanesque architecture (circa 1000-1200 AD) characterized by their semi-circular arches and representations of biblical and religious themes.

Saint-Sernin

A historic basilica in Toulouse, France, known for its Romanesque architecture and significance as a key stop on the pilgrimage route to Santiago de Compostela.

Bernardus Gelduinus

A sculptor of the Romanesque period, known for his work on the ambulatory capitals at the Basilica of Saint-Sernin, Toulouse.