Which of the Following Statements Is True About Foreign Bonds

question 99

Multiple Choice

Which of the following statements is true about foreign bonds?

• A) The interest rate on foreign bonds is annually adjusted for inflation.
• B) Foreign bonds are bonds sold in a foreign country and are denominated in the currency of the country in which the issue is sold.
• C) Foreign bonds are bonds sold by a foreign borrower but convertible to bonds issued in the foreign country.
• D) The term Eurobond specifically applies to any foreign bonds denominated in U.S. dollars.
• E) The interest rate on foreign bonds is adjusted annually for exchange rate fluctuations.

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Definitions:

Maturity

The date on which a financial obligation must be repaid or a financial instrument, such as a bond, reaches its final due date and the principal is returned to investors.

Principal Payment

The portion of a loan payment that goes towards paying down the original amount borrowed, as opposed to interest.

Installment Note

A debt instrument that requires a series of payments over time, including interest and principal.

Annual Payment

A recurring payment made once a year, often related to loans, insurance policies, or subscriptions.