1. Which of the following are reasons why an MNC might issue bonds in a particular foreign market? Check all that apply.

• The MNC intends to finance a project in a specific country and in a specific currency.
• The currency in that foreign market is expected to depreciate against the MNCs home currency.
• There is a lower interest rate in that foreign country.
• There is stronger demand for bonds issued by the MNC in a foreign market as opposed to the domestic market.

If there is ________(no active market OR a highly active market) for a bond, a bondholder may not be able to sell a bond at the desired time or may have to decrease the price of their bonds in order to sell them. The risk of this occurrence is known as __________( liquidity, interest rate, exchange rate, OR credit) risk.