Exhibit 21-2
Moore Corporation Would Like to Simultaneously Invest in Malaysian

question 36

Multiple Choice

Exhibit 21-2
Moore Corporation would like to simultaneously invest in Malaysian ringgit (MYR) and Romanian leu (ROL) for a three-month period. Moore would like to determine the expected yield and the variance of a portfolio consisting of 40% ringgit and 60% leu. Moore has identified the following information:
$\begin{array}{c}\begin{array}{lll}\text {Mean effective financing rate of Malaysian ringgit for three months}\\\text { Mean effective financing rate of Romanian leu for three months }\\\text {Standard deviation of Malaysian ringgit's effective financing rate }\\\text {Standard deviation of Romanian leu's effective financing rate }\\\text { Correlation coefficient of effective financing rates of these two currencies } \end{array}\begin{array}{c}3 \% \\2 \% \\.15 \\.07 \\.19 \end{array}\end{array}$
-Refer to Exhibit 21-2. What is the standard deviation of the portfolio contemplated by Moore Corporation?

• A) .624%.
• B) 7.950%.
• C) 1.040%.
• D) 10.200%.
• E) none of the above

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Definitions:

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