Maston Corporation Has Forecasted the Value of the Russian Ruble

question 7

Multiple Choice

Maston Corporation has forecasted the value of the Russian ruble as follows for the next year:
$\begin{array}{cccc}\underline {\text { Percentage Change} }&\underline{ \text { Probability of Occurrence }} \\ \text {-5\% } &20\%\\ \text { -3\% } &50\%\\ \text { 1\% } &30\%\\\end{array}$

If the Russian interest rate is 30%, the expected cost of financing a one-year loan in rubles is:

• A)27.14%.
• B)32.86%.
• C)26.10%.
• D)none of the above

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