Chapter 12: International Bond Market

Which functions do Eurobond clearing systems typically perform? A. Distributing a new bond issue B. Underwriting a new bond issue C. Financing inventory D. Distributing coupon payments

A. Distributing a new bond issue C. Financing inventory D. Distributing coupon payments

A Chinese borrower issuing dollar-denominated bonds to investors in Jordan, Japan, and Argentina is an example of a(n) ______. A. Eurobond B. dual-currency bond C. foreign bond D. dragon bond

A. Eurobond D. dragon bond

The Eurobond clearing systems principally transfer ownership ______. A. electronically B. physically C. first electronically, then physically

A. electronically

A very large bond issue that would be difficult to sell in any one country or region of the world is termed a(n) ______. A. global bond B. Eurobond C. foreign bond D. international bond

A. global bond

In the United States, typically foreign and domestic bonds are ______ and Eurobonds are ______. A. registered; bearer B. bearer; bearer C. bearer; registered D. registered; registered

A. registered; bearer

Why is the Eurodollar bond segment of the international bond market generally more desirable than the Yankee bond segment for issues offered in the United States? A. bonds offer the protection of SEC regulation. B. Eurodollar bonds can be brought to market more quickly. C. Yankee bonds have a 40-day restriction period on offers and sales after issue. D. Borrowers pay lower rate of interest for Eurodollar bond financing.

B. Eurodollar bonds can be brought to market more quickly. D. Borrowers pay lower rate of interest for Eurodollar bond financing.

Which has been the largest issuer of international bonds? A. General government B. Financial corporations C. Non-financial corporations D. International organizations

B. Financial corporations

Possession is evidence of ownership for a(n)______ bond.

Bearer

A typical size of a global bond issue is about $1 ______. A. thousand B. million C. billion D. trillion

C. billion

The SEC instituted shelf registration with ________ in ______. A. Rule 144A; 1990 B. Rule 144A; 1982 C. Rule 415; 1982 D. Rule 415; 1990

C. Rule 415; 1982

The 1933 law that requires full disclosure of relevant information relating to a security issue is the ______ Act. A. Sarbanes-Oxley B. Robinson-Patman C. U.S. Securities D. Glass-Steagall

C. U.S. Securities

The profit of market makers in the secondary market is from ______. A. underwriting spreads B. subscriptions C. commissions D. bid-ask spreads

D. bid-ask spreads

The part of the market that deals with the issuance of new bonds from borrowers to the investment public, typically via syndicates, is the ________ market.

Primary

The preregistration of a securities issue that is held for later sale when financing is actually needed is _____ registration.

Shelf

Financial market participants that accept buy or sell orders from market makers and then attempt to find a matching party for the other side of the trade are _______

brokers

Bonds purchased in the primary market may be resold before their maturity in the ______ market.

secondary

The discount from the issue price for the underwriters is referred to as the underwriting ______

spread

An underwriting _______ is a group of banks that bring a bond issuance to market.

syndicate

A bank that commits its own capital to buy a bond issuance from the borrower at a discount from the issue price is a(n) ______ for the issue.

underwriter