Question

Which of the following statement is TRUE?

	a.	Eurobonds are those that are issued in euros and sold in the Eurozone.
	b.	While Yankee bonds refer to bonds issued by foreign companies in the United States, bonds issues by American companies in the Eurozone are called reverse Yankees.
	c.	IBF stands for international banking facilities that allow U.S. residents deposits of currencies other than the U.S. dollar in domestic banks in the United States.
	d.	FRAs refer to floating rate agreements in which central banks commit to a floating exchange rate arrangement.

Answer 1

Answer : True statement : b) While yankee bond refers to bonds issued by foreign companies in the united states, bonds issued by American companies in the eurozone are called reverse yankees.

Reason : Eurobonds are denominated in currency other than home currency.

IBF means international banking facility that allow deposits or loan facility in U. S to foreign residents and institutions and not to U. S residents.

FRA refers to forward rate agreement is the over the counter contract between parties that determine interest rate to be paid on agreed date in future.