International Business Machines (IBM) included the following information in Note K to its 2008 financial statements:

1. IBM lists eleven different issues of notes and debentures. What is a debenture?
2. What is unusual about the 7.125% debentures?
3. IBM has borrowed the equivalent of $5.460 billion in the form of foreign currency loans. Why would IBM get loans denominated in foreign currencies rather than get all of its loans in U.S. dollars?
4 The average interest rates on the foreign currency loans range from a low of 1.8% for loans of Japanese yen to 10.2% for loans of other currencies. What factors would cause IBM to pay a higher interest rate when it borrows other currencies than when it borrows Japaneseyen?

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Long-Term Debt At December 31, 2008 (dollars in millions) At December 31: Maturities 2008 2007 U.S. Dollar Notes and Debentures 3.55% 5.67% 6.25%. 8.375%. " 7.00% 6.22% 6.50% 5.875% 8.00%, . 700 71 25% 2009-201 $10,496 $12,295 3,545 3,026 750 600 469 313 2012-2013 2014-2018 2019 2025 2027 2028 5,053 4,761 750 600 469 313 2032 S 600 S 600 1,000 150 2096850 22 5OR 2038 2045 150 850 S25,041 $22,598 Other currencies (average interest rate at December 31, 2008, in parentheses): Euros (4.4%) 2010-2014 S 3,330 S 2,466 767 442 89 S30,502 $26,362 2010-2014 2011-2014 2009-2013 1,457 470 203 Swiss francs (3.4%) Other (10.2%)