Response to the following problem:
Floating Rate Bonds
a. What factors should be considered by a U.S. 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 ?oating rate foreign currency-denominated bond to exhibit?