Which of the Following Is True of Brady Bonds

question 57

Multiple Choice

Which of the following is true of Brady bonds?

• A)They are uncollateralized.
• B)They have a shorter maturity and a higher than promised coupon (yield)than the original sovereign loans.
• C)The benefit from Brady bond is the "saving" from lower interest spreads required on such bonds.
• D)Their value partly reflects the value of collateral underlying the principal and/or interest on the issue.

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Definitions:

Second Law

An ambiguous term that may refer to the second law of thermodynamics, which states that the entropy of an isolated system not in equilibrium almost always increases.

Thermodynamics

The branch of physics that deals with the relationships between heat and other forms of energy, and how they affect matter.

Potential Energy

The energy possessed by a body by virtue of its position relative to others, stresses within itself, electric charge, and other factors.

Kinetic Energy

The energy that an object possesses due to its motion, directly proportional to the mass of the object and the square of its velocity.