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    Bonds in Benchmark Market Rates

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    1.Bonds generally refer to a benchmark market rate. If a firm expects to have additional financial requirements in the future, would you recommend that it uses convertibles or bonds with warrants? What factors would influence your decision?
    2.Technology has been responsible for major changes in many industries over time. Developing a good system to link all aspects of an organization is essential for the organization's success. What is the common role of a banking institution in international trade besides financing?
    3.With the constant growing of competitive market, the need for an adequate information system department within an organization is essential for decision making. Database systems can provide tools for an integrated system for cost control. Do you think that having a developed and well integrated system gives a company an edge over its competitors?
    4.The Banking Organization will encounter issues if failing to have a good and solid information system for transactions and data processing all over the world. Without good system, many banks that relied on data accuracy for decision making will be without element based for their decisions. How do you think the database system help shape the financial data communication among the banking system?
    5.Sinking fund provisions sometimes turn out to adversely affect bondholders, and this is most likely to occur if interest rates decline after the bond has been issued. Why do you think this is a correct statement?
    6. Interest rate swaps to hedge the risk of interest rate risk when issuing floating rate bonds in international market enable companies to exchange fixed rate payment for variable rate payment and vice versa. Can you explain the mechanics further?

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    1.Bonds generally refer to a benchmark market rate. If a firm expects to have additional financial requirements in the future, would you recommend that it uses convertibles or bonds with warrants? What factors would influence your decision?

    The firm can either use warrants or convertibles because if the firm expects to need additional financing in the future, warrants will provide the necessary funding while when choosing to exercise these additional funds by directly bringing them into the firm is done through convertibles. Therefore, when the warrants are converted, the equity base is expanded and debt can be sold more easily.

    2.Technology has been responsible for major changes in many industries over time. Developing a good system to link all aspects of an organization is essential for the organization's success. What is the common role of a banking institution in international trade besides financing?

    In reference to the role of a banking institution, it is common knowledge that they play a critical role in international trade by providing trade finance products, which reduce the risk of exporting, but they also have other roles such as business checking or deposit accounts, service fees and project ...

    Solution Summary

    The expert examines bonds in benchmark market rates.

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