1. Expain the what are Eurobonds and Foreign bonds. Provide the example for each of them. (10 points) 2. Explain, compare and contrast straight fixed bonds and dual currency bonds and provide the example for each of them. (15 points) Please solve the following questions: 3. X AA 10.5% Fitch's credit rating Fixed-rate borrowing cost Floating-rate borrowing cost z BBB 12.5% LIBOR LIBOR+1 a. Calculate the quality spread differential (QSD). (5 points) b. Develop an interest rate swap in which both X and Z have an equal cost savings in their borrowing costs. Assume X desires floating-rate debt and Z desires fixed-rate debt. No swap bank is involved in this transaction. (15 points) c. Do problem I over again, this time assuming more realistically that a swap bank is involved as an intermediary. Assume the swap bank is quoting five- year dollar interest rate swaps at 10.9% - 11.2% against LIBOR flat. (15 points)