CFA Practice Question
Eurobonds are bonds that are ______
A. sold in a foreign currency by a foreign issuer. A dollar-denominated bond issued by Ford in France would be an example of a Eurobond. Most Eurobonds are now actually issued outside of Europe.
B. denominated in a currency not native to the country in which they were issued. Eurobonds are typically issued in Europe, with London being the main trading center.
C. sold in a country and using its currency by a foreign issuer. A dollar-denominated bond issued in the U.S. by Sony would be an example of a Eurobond.
Explanation: Eurobonds include Eurodollar, Euroyen, and Eurosterling bonds. A Eurodollar bond, for example, would be a dollar-denominated bond issued outside the U.S. Yankee bonds are dollar-denominated bonds issued in the U.S. by foreign issuers.
User Contributed Comments 6
| User | Comment |
|---|---|
| Dancho | I am not sure that it is a feature (London) of these bonds? |
| ostrich | Why doesn't A apply, seems to meet B's criteria? |
| surob | A should have been - "sold in a foreign currency by an issuer not domiciled in the bond has been issued |
| cong | A is wrong because most eurobonds are issued inside europe. C is wrong because currency should not be the domestic currency of the country in which the eurobond is issued. |
| Kashi2010 | Asia & ME are becoming pretty big markets for Eurobonds too.. Expecting us to remember that Europe is/was the largest seems a little pointless. |
| jameshj | I thought there have to be three separate countries: issuers country, country of listing and currency of third country |