1. Briefly describe the pros and cons of a modest allocation to emerging markets bonds for risk-tolerant investors. Assume the currency risk will be hedged.
2.Which of the following have been causes of municipal bankruptcies in the past?
a. Revenue bonds issued for projects which become too costly to complete.
b. Deteriorating economic conditions
c. The question is misleading - municipal bonds, like U.S. Treasury bonds, have never defaulted.
d. Fraud or mismanagement of the project
e. Revenue bonds issued for projects which are deemed unnecessary