Considering investing in sovereign bonds

Assignment Help Financial Management

Reference no: EM131944683

You are considering investing in Sovereign bonds. You got some advices from the financial adviser in your local bank. Which one of the following advices does make sense to you:

A) Unlike a corporate, a country facing difficulty meeting its financial obligations typically has the option to print more currency. Therefore, sovereign debts have no default risk.

B) Unlike other countries member states of the European Economic and Monetary union facing difficulties meeting its financials obligations can always turn to european central bank to ask for help. Therefore, the possibility of default within EMU is zero.

C) since member states of EMU all use a unique currency all these countries in the union are essentially exposed to the same default, inflation and currency risk.

D) ''Inflating away'' the debt is not necessarily better for investors than an outright default.

Reference no: EM131944683

Questions Cloud

What are the benefits of conducting a swot analysis : What are the benefits of conducting a SWOT analysis when starting a business?

What is the appropriate reorder? point : What safety stock level do you recommend for? BX-5?What is the appropriate reorder? point?

How poor communication can be detrimental to an organization : Discuss how poor communication can be detrimental to an organization. Be sure to address both informal and formal methods of communication.

Rhetorical concept of classical movement : The rhetorical concept of classical movement is a myth, critically examined two basic theorists in classical school by company

Considering investing in sovereign bonds : You are considering investing in Sovereign bonds. ''Inflating away'' the debt is not necessarily better for investors than an outright default.

Please explain best tool for anti hijack plan : Under Manager Leadership program, please explain best tool for Anti hijack plan. What is emotional hijack and how to control it and provide positive results?

How much will he be able to withdraw each month : If Berndt plans to live to age 82, how much will he be able to withdraw each month during his retirement? (Please no formulas. We did not learn using formulas).

Compute the variance of activity complete time : Find the expected activity time . Compute the variance of activity complete time . What is the critical path.

Measure the benefits and costs of implementing schedule : Benefit-cost analysis experts agree that to the extent you can quantify benefits and costs, you should do this. However, some people complain.

User Account

All Pages