#31

The country of Bronxland is planning to issue bonds denominated in U.S. dollars. The bond issue will be worth $1 billion. The current exchange rate between the dollar and the bomber (Bronxland's currency) is 1 bomber equals \$1.35. Suppose the exchange rate changes so 1 bomber equals $1.25. Did the bomber appreciate or depreciate against the dollar. Explain. How much will it cost Bronxland to repay this loan