1. In the early Summer of 2011, Columbia issued $2 billion of 10-year, 4.375% international ("foreign") bonds denominated, obviously, in U.S. dollars, bot in Columbian pesos. Which is most likely?
A. Columbia will pay off the lenders in U.S. dollars.
B. Columbia will pay off the lenders in Columbian pesos.
C. Columbia will enter into a swap contract with a third party, which will take pesos payments from Columbia and pay the lenders in dollars.
D. Columbia will make an agreement with the lenders to repay the lenders in whichever currency, Columbian pesos or American dollars, is worth more at the time of payment.
2. On eBay, you purchase a new pair of $50 shoes from a merchant manufacturrer in China. Your $50 will go to the People's Bank of China, which will then deposit in the Chinese manufacturer's account the pegged exchange rate amount in yuan (until recently, that would have been 8.28 yuan per dollar, so the merchant would have realized a deposit of 8.28*50, or 414 yuan.) At this point, the $50 has become...
A. foreign bonds
B. eurodollars
C. eurobonds
D. yankee bonds
E. yuan dollars