Consider the following five statements. i.A eurobond is a bond issued by a foreign borrower in a currency that is not the currency of the country in which the bond is issued.
ii.Eurobonds tend to be bought mainly by banks and institutional investors,rather than by individuals.
iii.Straight eurobonds are fixed-interest securities with periodic coupon payments.
iv.FRNs are coupon instruments; however,the coupon is reset periodically throughout the term of the note.
v.Convertible notes give the holder the option to convert the bond,on predetermined terms,into another form of instrument such as equity.
Which of the following are correct?

Question

Quizplus · Accepted Answer

The statements i, ii, iv, and v are correct. Statement i accurately describes a eurobond. Statement ii is true as eurobonds are typically purchased by institutional investors rather than individual investors. Statement iv correctly describes Floating Rate Notes (FRNs) as having periodically reset coupons. Statement v accurately describes convertible notes, which can be converted into another form of security, typically equity, under predetermined conditions. Statement iii is also true, but it is not part of the correct option based on the given choices.

Consider the Following Five Statements