a. The default rate on loans made by Rowan Mining Workers Credit Union (a CU open to 750 miners of Rowan mining company and their families) is significantly lower than Washington Federal Credit Union (a CU open to residents of the great state of Washington). Why do you think it is so?

b. Why would an investor in India be willing to buy a US bond that pays 0.25% coupon when he can buy an Indian bond that pays 8% coupon? Do note that for an Indian investor Indian bonds are risk-free. The Indian investor does not have any payable or debt in USD.