Yankee CD

Finance allah shmoop what is a dual currency bond Well

a currency duel would be way cooler to bonds One

dusty road in the wild west a saloon a gal

and a gun plan retired or called are paid whatever

they call bonds when they're dead Anyway a duel currency

bond is a bond where the principal and the interest

payments are made in different currencies like here's a bond

whose principal is paid off in u s dollars But

its interest is paid in euros and yeah whatever currency

being used for interest payments is called the base currency

Well why would you the investor of want one of

these things Well dual currency bonds or subject to exchange

rate risk In other words you're making a gamble not

just on an investment but on which way the exchange

rate will bounce That is if you own something it's

highly exposed two euros while then you're kind of making

a bet that the relative to the dollar the euro

zehr gonna appreciate mohr like the government's printing less of

them You have less inflation whatever because then if that

repayment currency appreciates well boom you're more in the money

Than just the interest you collected And if that currency

doesn't appreciate well there's always bank robbery is a last 00:01:21.189 --> [endTime] resort dual currency dueling currencies No