Identify/define and Explain the Significance of the Following: the Forum

question 28

Essay

Identify/define and explain the significance of the following: the Forum.

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Definitions:

Currency Risk

The potential for financial loss resulting from fluctuations in exchange rates affecting investments or transactions in foreign currencies.

Foreign Bonds

Bonds sold by a foreign borrower but denominated in the currency of the country in which the issue is sold. Thus, a Canadian firm selling bonds denominated in Swiss francs in Switzerland is selling foreign bonds.

Domestic Bonds

Bonds issued within a country's borders and typically denominated in that country's currency.

Market Rate of Interest

The prevailing rate of interest determined by supply and demand in the credit market that borrowers must pay to lenders.