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QUESTION
Floating rate Bonds: a. What factors should be considered by a US firm that plans to issue a floating rate bond denominated in a foreign currency?
- Floating rate Bonds: a. What factors should be considered by a US firm that plans to issue a floating rate bond denominated in a foreign currency? b. Is the risk of issuing a floating rate bond higher or lower than the risk of issuing a fixed rate bond? Explain c. How would an investing firm differ from a borrowing firm in the features (i.e., interest rate and currency's future exchange rates) it would prefer a floating rate foreign currency denominated bond to exhibit?
