Question: QUESTION 1 (25 MARKS) The Export Development Canada issued a bond on March 17, 2016. The terms were as follows: Currency of denomination : Japanese

QUESTION 1 (25 MARKS) The Export Development Canada issued a bond on March 17, 2016. The terms were as follows: Currency of denomination : Japanese Yen (JPY) Denomination JPY100,000,000 Maturity date : March 18, 2026, or an optional redemption date Redemption/payment basis : Redemption at par value Interest payment dates : March 18 and September 18 in each year Optional redemption dates The issuer has the right to call the instruments in whole (but not in part) at par starting on March 18, 2019. Interest rate: Fixed rate for the first three years up to but excluding March 18, 2012: 1.5% March 18, 2019 - September 18, 2019 1.75% - 6-month JPY LIBORBBA September 18, 2019 - March 18, 2020 1.75% - 6-month JPY LIBORBBA March 18, 2020 - September 18, 2020 2.00% - 6-month JPY LIBORBBA September 18, 2020 - March 18, 2021 2.00% - 6-month JPY LIBORBBA March 18, 2021 - September 18, 2021 2.25% -6-month JPY LIBORBBA September 18, 2021 - March 18, 2022 2.25% - 6-month JPY LIBORBBA March 18, 2022 - September 18, 2022 2.50% - 6-month JPY LIBORBBA September 18, 2022 - March 18, 2023 2.50% - 6-month JPY LIBORBBA March 18, 2023 - September 18, 2023 2.75% - 6-month JPY LIBORBBA September 18, 2023 - March 18, 2024 2.75% - 6-month JPY LIBORBBA March 18, 2024 - September 18, 2024 3.00% - 6-month JPY LIBORBBA September 18, 2024 - March 18, 2025 3.00% - 6-month JPY LIBORBBA March 18, 2025 - September 18, 2025 3.25% - 6-month JPY LIBORBBA September 18, 2025 - March 18, 2026 3.25% - 6-month JPY LIBORBBA (a) Explain what is meant by JPY LIBORBBA. (7 marks)

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2. To understand that as a general rule it takes about 3 minutes before the other part(s) have made up a 90% impression of you.