Foreign bonds and Eurobonds
List some of the differences between the foreign bonds and Eurobonds and also describe why Eurobonds make up lion’s share of the international bond market.
Expert
Two segments of international bond market are:
a) Eurobonds and b) Foreign bonds.
Foreign bond issues are the one that is provided by the foreign borrower to investors in the national capital market and is denominated in that nation’s currency. Eurobond issue is one that is denominated in particular currency, however, sold to investors in the national capital markets other than the country that issues denominating currency.
Eurobonds make up over 80 percent of international bond market. Two important causes for this arise from the fact that U.S. dollar is the currency that is frequently sought in the international bond financing. Firstly, Eurodollar bonds is brought to the market more rapidly as compared to the Yankee bonds since they are not provided to the U.S. investors and therefore do not have to meet the strict SEC registration requirements. Secondly, Eurobonds are bearer bonds which give anonymity to the owner and therefore provide the mode for evading the taxes over the interest received. Due to this, investors are usually willing in order to accept the lower yield on Eurodollar bonds as compared to the registered Yankee bonds of comparable terms, where the ownership is recorded. For borrowers, lower yield means a lower cost of debt service.
Explain why most of the international bonds have high Moody’s or Standard & Poor’s credit ratings?
Describe the contingent exposure and also discuss some of the benefits of using currency options in order to maintain this type of currency exposure.
Write down the merits of Budgetary Control?
Describe the term Purchase return with suitable example?
Describe how discount and premium are evaluated whenever the assets are priced-to-market. When would law of one price prevail within the international capital markets in case foreign equity ownership restrictions are imposed?
Average Profit Method: (Goodwill method): The profit earned by an organization throughout previous accounting periods on an average basis is termed as average profit. Goodwill is computed on the basis of average profit due to prospect expectations of
Define Expenditures with suitable example?
Investment approach of Warren Buffet: According to Benjamin Graham, the father of securities analysis, value investment was the only form of investment which means that purchasing a stock at less than its intrinsic
State what is meant by Subsidiary bank.
Write down the regions where uniform costing can be executed?
18,76,764
1948612 Asked
3,689
Active Tutors
1429949
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!