1 the bloomberg website provides interest rate data for many countries and various m 1319240

1.   The Bloomberg website provides interest rate data for many countries and various maturities. Its ad- dress is http://www.bloomberg.com. Go to the Markets section of the website and then to Bonds and Rates and then click on Australia. Consider a subsidiary of a U.S.-based MNC that is located in Australia. Assume that when it borrows in Austra- lian dollars, it would pay 1 percent more than the risk-free (government) rates shown on the website. What rate would the subsidiary pay for 1-year debt? For 5-year debt? For 10-year debt? Assuming that it needs funds for 10 years, do you think it should use 1-year debt, 5-year debt, or 10-year debt? Explain your answer.

 

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