ChocTurk Co. ChocTurk Co. is a Turkish chocolate manufacturer that exports its products to neighboring European nations. Since its clients are mostly European, ChocTurk Co. evaluates all business results and financial transactions in euros. It needs to borrow

€5,000,000 or the foreign currency equivalent for four years. It decides to issue bonds, making one annual payment at the end of each year. The following are the alternatives:

a. Sell Japanese yen bonds at par yielding 2% per annum. The current exchange rate is ¥136/€, and the yen is expected to strengthen against the dollar by 3% per annum.

b. Sell bonds denominated in pounds sterling at par yielding 5% per annum. The current exchange rate is £0.7350/€, and the pound is expected to weaken against the euro by 4% per annum.

c. Sell euro bonds at par yielding 4% per annum.
Which course of action do you recommend ChocTurk Co. to take and why?

Petrobrás Petróleo Brasileiro S.A. or Petrobras is the national oil company of Brazil. It is publicly traded, but the government of Brazil holds the controlling share. It is the largest company in the Southern Hemisphere by market capitalization and the largest in all of Latin America. As an oil company, the primary product of its production has a price set on global markets—the price of oil—and much of its business is conducted the global currency of oil, the U.S. dollar.