A bond that makes payments in a certain currency contains the risk of holding that currency and so is priced according to the yields of similar bonds in that currency.

Question

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When a bond makes payments in a certain currency, there is a risk associated with holding that currency, such as inflation or exchange rate fluctuations. Therefore, the bond is priced according to the yields of similar bonds in that currency to account for this risk.

A Bond That Makes Payments in a Certain Currency Contains