1. Sabrina is based in Japan and she would like to invest in a U.S. corporation to diversify her portfolio. Currently the U.S. corporation is issuing two bonds in the Japanese market:

• Bond NYS which is a Eurobond.
• Bond NUT which is a Foreign bond.

Please fill in the blanks below.

Bond NYS should not be denominated in (which currency?) when it is issued and bond NUT should be denominated in (which currency?)

[2 Marks]

B. Sabrina finds that the JPY/USD exchange rate has been quite volatile over the past six months. She is concerned about the exchange rate volatility, which bond is best for her and please explain your answer.