Which one of the following statements concerning a global view of the bond market is correct?
A) U.S. pay bonds distribute both interest and principal payments in euros.
B) Exchange rate fluctuations influence the returns earned on foreign- pay bond holdings.
C) Foreign bonds, like junk bonds, have high default risk.
D) The United States today accounts for about seventy- five percent of the available fixed- income securities worldwide.

Question

Quizplus · Accepted Answer

Exchange rate fluctuations can affect the returns on foreign-pay bonds because the bond's interest and principal payments are made in a foreign currency, which must be converted back to the investor's home currency.

Which One of the Following Statements Concerning a Global View