0
A foreign bond has three characteristics: * The bond is either issued by a foreign entity (such as a government, municipality, or corporation). * The bond is traded on a foreign market. * and, The bond is denominated in a foreign currency. Foreign bonds are subject to currency risks, as when you hold the bond it is denominated in a foreign currency. As bonds take a specified time to mature, there is no guarentee of the return of the bond given the currency exchange fluctuations.
A eurobond is a bond issued and traded in a country other than the one in which its currency is denominated. A eurobond does not necessarily have to originate or end up in Europe although most debt instruments of this type are issued by non-European entities to European investors. Meaning an entity can place a bond on the German exchange denominated in American dollars.
Another difference is the composition of the underwriting syndicate. Eurobonds are underwritten by an international syndicate and is not subject to the rules and regulations of any country. Foreign bonds, however, are underwritten in the country of currency denomination, and are therefore subject to the regulations of that country.
What else can I help you with?
What do you mean by foreign exchange?
Foreign Exchange is Exchange between two currency.
Difference between Spot Exchange Rate and Exchange rate?
An exchange rate, which is also called the foreign-foreign exchange rate, is the rate that currency will be exchanged for another currency and may have a forward contract. The spot exchange rate is the current exchange rate today with immediate delivery and it is also called benchmark rates and outright rates.
What is foreign exchange operation?
The Eurosystem conducts foreign exchange operations according to Article 105 and consistent with the provisions of Article 111 of the Treaty establishing the European Community. Foreign exchange operations includeforeign exchange interventions;operations such as the sale of foreign currency interest income and so-called commercial transactions.
What is the difference between international trade and international finance?
international trade :exchange or business of goods and services across the bordersinternational finance :dependence on foreign countries to fund some activities or support economy
Discuss the advantages and disadvantages of euro bonds to borrowers and investors?
There are several advantages for companies to issue Eurobonds:Obtaining financing by issuing Eurobonds is often cheaper than obtaining a foreign currency bank loan.It is a way for companies to obtain financing in an economy where financing is hard to obtain. Issuing Eurobonds gives companies wider access to the international market which they may normally not be able to access.It gives companies the ability to raise funds without having to issue shares.Since Eurobonds are normally aimed at institutional investors and not the public, there are no advertisement costs involved and this therefore means lower costs for the issuing firm.Allows companies to obtain funds in a foreign currency to create a foreign currency liability to match against a foreign currency asset.Against these advantages, there are some disadvantages to consider:there are issue costs to take into accountif the debt is not matched against a foreign currency asset, the Eurobond issuing firm may be open to foreign exchange risk.There are several benefits to an investor who does put its money into Eurobonds":The bonds give an investor a possibility of achieving a higher yield on investments as compare to investing in most shares, bank and building society accounts, money market placements, etc.It is a "safe" investment in the sense that the full value of the bond will be replayed when the bond matures.As for disadvantages to the investor:Investing in a Eurobond is not a good idea for investors who may need a repayment of the investment at short notice.There is always the risk of the issuing company going under and the maturity value of the Eurobond not being paid.
What statement describes the foreign exchange rate?
The foreign exchange rate is also known as the exchange rate. This is defined as the difference between two currencies.
What is difference between money market and foreign exchange market?
Foreign exchange market is a market where foreign exchange currency problems are resolved in international trade. Where as Money market is for the lending and borrowing of short term loans.
What do you mean by foreign exchange?
Foreign Exchange is Exchange between two currency.
What is the difference between a floating and a pegged exchange rate?
pegged exchange rate is officially fixed in terms of gold or any other currency in foreign exchange. Floating exchange rate is flexible rate in which value of currency is allowed to adjust freely determined by the supply & demand of foreign exchange
Explain the difference between indirect and direct exchange rates?
The difference between indirect and direct exchange rates is that an indirect exchange rate is the number of foreign currency units that may be obtained for one local currency unit and a direct exchange rate is the number of local currency units needed to acquire one foreign currency unit. The direct exchange rate has the local currency units in the numerator (the U.S. dollar for the direct exchange rate for the U.S. dollar).
What is the difference between the stock market and the currency exchange market?
Ownership in companies is traded in the Stock Market while ownership of foreign money is traded in the currency exchange market.
Difference between Spot Exchange Rate and Exchange rate?
An exchange rate, which is also called the foreign-foreign exchange rate, is the rate that currency will be exchanged for another currency and may have a forward contract. The spot exchange rate is the current exchange rate today with immediate delivery and it is also called benchmark rates and outright rates.
What is the difference between a temporary permanent and foreign passport?
the difference between permanent passport and foreign passport
What is the difference between forex and foreign exchange?
"Forex" and "foreign exchange" refer to the same concept: the global marketplace for trading currencies. "Forex" is simply an abbreviation of "foreign exchange" and is commonly used in trading contexts. Both terms encompass the buying and selling of currencies to facilitate international trade, investment, and speculation. The term "forex" often conveys a more informal or retail trading context, while "foreign exchange" can refer to broader financial and institutional activities.
How is a foreign exchange market different from foreign exchange?
Foriegn Exchange invloves physical transaction of currencies from a dealer or broker. But Foreign Exchange Market involves a virtual transaction with real money. Foreign Exchange market is largest of all the markets and nearly 10 times bigger than NYSE. These simple sentences can't explain the difference. You need to drill more to know what it is.
What is the significance and difference in foreign currency exchange rates?
The differences in foreign currency exchange rates is also called a spread. The size of the spread determined by the liquidity of the pair, the amount of buyers and sellers.
What is the difference between foreign and abroad?
I would describe the difference as adjective and noun. If something is foreign, its coming from abroad.
