Q150
Type of bonds which does not have U.S treasury as collateral and are swapped for outstanding loans are classified as
A.
collateral bonds
B.
sovereign bonds
AnswerC.
primary bonds
D.
secondary bonds
Answer: Option B
Solution
Answer: Option B
Solution:
Type of bonds which does not have U.S treasury as collateral and are swapped for outstanding loans are classified as sovereign bonds. A sovereign bond is a debt security issued by a national government. Sovereign bonds can be denominated in a foreign currency or the government’s domestic currency; the ability to issue bonds denominated in domestic currency tends to be a luxury that most governments do not enjoy the less stable of a currency denomination, the higher the risk the bondholder's faces.