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

question 17

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:

-Refer to Exhibit 21-2. What is the expected effective yield of the portfolio contemplated by Moore Corporation?

• A) 2.50%.
• B) 2.60%.
• C) 2.40%.
• D) none of the above

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Definitions:

Annual Coupon

The interest payment made by a bond issuer to the bondholders, usually annually.

Yield To Maturity (YTM)

The rate of interest earned on a bond if it is held to maturity.

Premium

Premium in finance usually refers to the extra amount paid over the standard or nominal value, as in insurance premium payments or the additional amount to purchase securities.

Discount

A reduction applied to the nominal price of goods, services, or securities, often to incentivize purchase or investment.