Which of the statement is incorrect? i) Eurobond is a bond issued by an international investor and sold to borrowers in countries with currencies other than the currency in which the bond is denominated. ii) Foreign bond is a bond issued in a host country’s financial market, in the host country’s currency, by a foreign borrower. iii) Eurobond is a bond issued by an international borrower and sold to investors in countries with currencies other than the currency in which the bond is denominated. iv) In contrast, a foreign bond is a bond issued in a host country’s financial market, in the foreign currency, by a foreign borrower.

Which of the statement is incorrect? i) Eurobond is a bond issued by an international investor and sold to borrowers in countries with currencies other than the currency in which the bond is denominated. ii) Foreign bond is a bond issued in a host country’s financial market, in the host country’s currency, by a foreign borrower. iii) Eurobond is a bond issued by an international borrower and sold to investors in countries with currencies other than the currency in which the bond is denominated. iv) In contrast, a foreign bond is a bond issued in a host country’s financial market, in the foreign currency, by a foreign borrower.

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter18: Long-term Debt Financing

Section: Chapter Questions

Problem 1QA

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Define each of the following terms: a. Multinational corporation b. Exchange rate; fixed exchange rate system; floating exchange rate c. Trade deficit; devaluation; revaluation d. Exchange rate risk; convertible currency; pegged exchange rate e. Interest rate parity; purchasing power parity f. Spot rate; forward exchange rate; discount on forward rate; premium on forward rate g. Repatriation of earnings; political risk h. Eurodollar; Eurobond; international bond; foreign bond i. The euro
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