a) Briefly explain, to the uninitiated reader, the notion of the effective financing rate alongside its formal computation that multinational corporations (MNCs) deploy as benchmark of financing for their global operations. b) A US firm is considering borrowing British pounds (GBP) and Australian dollars (AUD) for a year. The firm will need 65% in GBP and 35% in AUD. The quoted Sterling and AUD borrowing rates are 1.7% and 2.2% respectively, while the US dollar (USD) borrowing rate is 1.3%. Given the information below find the effective financing rate and the expected effective financing rate for each currency, as well as for the portfolio of currencies. Possible percentage change Currency GBP Probability 0.75 0.015 GBP -0.040 0.25 AUD -0.045 0.65 AUD 0.060 0.35 Moreover, a) what is the probability that the foreign currency portfolio's effective financing rate will be less than the domestic one? b) should the US firm borrow in USD or in foreign currency? and c) what is the risk in each scenario? a) Briefly explain, to the uninitiated reader, the notion of the effective financing rate alongside its formal computation that multinational corporations (MNCs) deploy as benchmark of financing for their global operations. b) A US firm is considering borrowing British pounds (GBP) and Australian dollars (AUD) for a year. The firm will need 65% in GBP and 35% in AUD. The quoted Sterling and AUD borrowing rates are 1.7% and 2.2% respectively, while the US dollar (USD) borrowing rate is 1.3%. Given the information below find the effective financing rate and the expected effective financing rate for each currency, as well as for the portfolio of currencies. Possible percentage change Currency GBP Probability 0.75 0.015 GBP -0.040 0.25 AUD -0.045 0.65 AUD 0.060 0.35 Moreover, a) what is the probability that the foreign currency portfolio's effective financing rate will be less than the domestic one? b) should the US firm borrow in USD or in foreign currency? and c) what is the risk in each scenario