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8. To benefit from the low correlation between the Trinidad dollar and the Japanese yen a (V), SIO Corporation decides to invest 50 percent of

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8. To benefit from the low correlation between the Trinidad dollar and the Japanese yen a (V), SIO 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. SIO has determined the following possible percentage changes in the two individual currencies as follows:I Percentage Changea 1.0%; 2.0% ai Probabilitvai Currency Trinidad dollarb Trinidad dollarb 35% 65% Japanese yen Japanese yen 2.0% 1.0% 45% 55% a. What is the expected effective yield of the portfolio SIO is contemplating assume the- two currencies move independently from one another? Show work n b. What is the probability that the yield of the two-currency portfolio is less than the domestic yield?0- ir Show work|

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