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A Brazilian firm issues Yankee bonds. These are bonds: a. denominated in Brazilian real and issued...

A Brazilian firm issues Yankee bonds. These are bonds:

a. denominated in Brazilian real and issued in U.S.

b. denominated in Brazilian real and issued in London and Luxenburg

c. denominated in US dollars and issued in Brazil

d. denominated in US dollars and issued in U.S.

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Answer #1

The correct answer is d. denominated in US dollars and issued in U.S.

Where a foreign company or firm issues a US dollar denominated bonds in U.S then it is known as a Yankee Bond. These bonds are known as foreign bonds. These bonds are registered and issued subject to regulations of U.S authorities. U.S investors buying these bonds do not take up the currency risk but they do take up country or political risk.

Thus when a Brazilian firm issues Yankee bonds it refers to US dollar denominated bonds issued in the U.S

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