Question

(a) State one difference and one similarity between Eurobonds and foreign bonds. (6 marks) (b) Give one example for each type of the bonds in (a). (4 marks)

Answer 1

(a) Euro bonds are the bonds which are issued in currency different than home currency of the country or market in which it is issued.

Bonds which are issued by a foreign company are called foreign bonds.

Similarity between the two is both are used in international markets and are considerd one of the main instruments in international market.

(b) Euro bond = If a company in Australia denominates the bond in Australian dollars but issues the same in market other than australia let say India then the same is called as Euro bond.

Foreign bond = If a US company dominates the bond In us dollars and Sold in the market of india than it is called foreign bond.