Question

    The debt instruments that help to raise money in local

    currency from foreign investors is called______
    A Masala Bonds Correct Answer Incorrect Answer
    B FCCB Correct Answer Incorrect Answer
    C FCEB Correct Answer Incorrect Answer
    D Foreign Bonds Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    Masala bonds are bonds issued by Indian companies in foreign countries but are denominated in Indian rupees. The payment of the coupon and principal is made in rupees, not in the currency of the foreign investors. Hence, the currency risk is borne by the investor.

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