Eurodollars refer to U.S. dollar-denominated deposits at foreign banks or at the overseas branches of American banks. They are so named not because they are in euros or in Europe necessarily, but because they are outside the jurisdiction of the United States and thus not under the direct influence of the U.S. monetary policy.

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Eurodollars Are

Question 27

Multiple Choice

Eurodollars are:

A) the new currency of the EU.
B) Euros held by Europeans in European bank accounts.
C) U.S. dollar deposits located outside the U.S.
D) an ADR of a foreign firm traded on the NYSE.

Correct Answer: