374 INTERNATIONAL FINANCIAL MANAGEMENT
market decline. To sum up, fixed-rate bond prices change significantly, if interest rates are
extremely volatile.
Financial markets have also witnessed the issuance of dual-currency bonds and multi-
currency bonds. A dual currency bond involves payment of interest in one currency and repay-
ment of the principal in another. For example, the coupon interest payments may be made
in Japanese yen, while the principal may be repaid in U.S. dollars. In the case of multicurrency
bonds, the investor will have the right to have repayment of the principal amount in one, two,
or more currencies.
Floating-rate Notes (FRNs)
Floating-rate notes (FRNs), also known as floaters are bonds with coupon payments indexed
to so ...