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A dual-currency bond makes coupon interest payments in one currency and the principal repayment at maturity in another currency.
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- A dual-currency bond pays coupon interest in a currency other than the home currency of the issuer. Select one: True FalseBriefly define each of the major types of international bond market instruments, noting their distinguishing characteristics. a) Straight fixed rate b) Floating-rate notes (FRNs) c) convertible bond d) Zero-coupon bonds e) dual-currency bond f) Composite currencyBriefly define each of the major types of international bond market instruments, noting their distinguishing characteristics. d) Zero-coupon bonds e) dual-currency bond f) Composite currency
- Discuss the advantages and disadvantages of a dual currency bond.A contract to sell a bond investment. Entities can buy the contract through an exchange. a.)Long forward contract b.)Variable-to-fixed interest rate swap c.)Short forward contract d.)Currency swap e.)Long futures contract f.)Fixed-to-variable interest rate swap g.)Short futures contractCompare the risk of buying a U.S. government bond to that of buying acorporate bond.
- Two bonds, bond A and bond B, are identical except that bond A is convertible and bond B is not. Which bond will have the higher price? Whyhich of the following bonds is considered a combination instrument? a. term bond b. convertible bond c. serial bond d. commodity backed bondThe advantages and disadvantages of a dual currency bond.
- Define each following terms: m. Interest rate parity; purchasing power parity n. Eurocredits; eurodollar o. Eurobond; foreign bondA Eurobond is a Group of answer choices A. bond payable in the borrower's currency and sold inside the borrower's country. B. bond payable in the investor's currency but sold inside the borrower's country. C. bond payable in the borrower's currency but sold outside the borrower's country. D. bond payable in the investor's currency but sold outside the borrower's country.Critique the distinctions between foreign bonds and Eurobonds, and explain why the Eurobonds have become the most popular form of international bond financing.
