Which statement correctly describes foreign bonds?

Which statement correctly describes foreign bonds?

• A. Issued by domestic issuers in foreign currency overseas.
• B. Denominated in foreign currency but issued in foreign market.
• C. Issued by domestic issuers in domestic currency.
• D. Issued by overseas entities in the domestic currency.

Answer: (D)

Foreign bonds are issued by issuers from outside the domestic market and sold in that market in the local currency. This means the issuer is overseas, and the bond is denominated in the domestic currency of the market where it’s issued. For example, a U.S. company issuing a bond in Japan in yen is a foreign bond for the Japanese market. That exact description—overseas issuers issuing in the domestic currency—best fits the concept. The other scenarios describe different bond types: domestically issued bonds in domestic currency are domestic bonds, and bonds issued in a foreign market or in a foreign currency align with other categories such as eurobonds or foreign currency bonds.

Foreign bonds are issued by issuers from outside the domestic market and sold in that market in the local currency. This means the issuer is overseas, and the bond is denominated in the domestic currency of the market where it’s issued. For example, a U.S. company issuing a bond in Japan in yen is a foreign bond for the Japanese market. That exact description—overseas issuers issuing in the domestic currency—best fits the concept. The other scenarios describe different bond types: domestically issued bonds in domestic currency are domestic bonds, and bonds issued in a foreign market or in a foreign currency align with other categories such as eurobonds or foreign currency bonds.