Define each of the following terms: h. Eurodollar; Eurobond; international bond; foreign bond

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Define each of the following terms: h. Eurodollar; Eurobond; international bond; foreign bond

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Define each of the following terms:
h. Eurodollar; Eurobond; international bond; foreign bond

Explanation & AnswerSolution by a verified expert

Sample Response

Eurodollar: When a U.S. dollar is deposited in a bank outside the U.S.A., it is called Eurodollar. Dollar is the leading international currency, and it is used for most of the international transactions. Thus, to make sufficient availability of funds with foreign countries, eurodollar is deposited in their banks. It is outside the ambit of the U.S.A. and thus it cannot regulate the interest rate associated with Eurodollar.
 
Eurobond: The bonds that are sold in foreign country, but denominated in the currency of the issuing company’s home country are known as eurobonds. A british company in germany issuing bonds in pound sterlings will be an example of euro bond.
 
International bond: A bond which is sold outside the country of the issuer, is called an international bond. International bonds are further classified into foreign bonds and euro bonds.
 
Foreign bonds: A bond which is issued by a foreign borrower is known as a foreign bond. Though the issuer of the bond is a foeign company, the bond will be quoted in domestic currency. For example, A german company issuing bonds in  the U.S.A. in dollars.

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