Straight bonds and floating rate notes are two basic types of bonds that may be issued into both the euromarkets and the US capital markets. Explain the basic features of a bond and differentiate between a straight bond and a floating rate note. [2 marks]

PART II: Novak Ltd is seeking to establish standby facility in the euromarkets. Explain to the CFO of Novak, the structure and purpose of a standby facility. Identify and briefly explain the risks that need to be considered by Novak when establishing a standby facility. [3 marks]