Asked by Maricris Tersol on May 07, 2024
Verified
Which of the following is the best definition of Eurocurrency.
A) Money deposited in a financial centre outside of the country whose currency is involved.
B) International bonds issued in multiple countries but denominated in a single currency (usually the issuer's currency) .
C) Banks that make loans and accept deposits in foreign currencies.
D) The implicit exchange rate between two currencies (usually non-U.S.) quoted in some third currency (usually the U.S. dollar) .
E) Second borrower in currency swap. Counterparty borrows funds in currency desired by principal.
Eurocurrency
Money deposited in a financial centre outside the country whose currency is involved.
Currency Swap
An agreement between two parties to exchange the principal amount and interest in two different currencies.
- Become familiar with the characteristics and roles of Eurobonds and Eurocurrency in the context of international financial operations.
Verified Answer
SM
Sarah morrisseyMay 09, 2024
Final Answer :
A
Explanation :
Eurocurrency refers to money deposited in a financial institution located outside the country whose currency is being deposited. This allows for the currency to be used in international transactions without the need to convert into the local currency of the bank holding the deposits.
Learning Objectives
- Become familiar with the characteristics and roles of Eurobonds and Eurocurrency in the context of international financial operations.