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Eurobonds are named after the currency they are denominated in. For example, Euroyen and Eurodollar bonds are denominated in Japanese yen and American dollars, respectively. Eurobonds were originally in bearer bond form, payable to the bearer and were also free of withholding tax. The bank paid the holder of the coupon the interest payment due.
Bond valuation is the process by which an investor arrives at an estimate of the theoretical fair value, or intrinsic worth, of a bond.As with any security or capital investment, the theoretical fair value of a bond is the present value of the stream of cash flows it is expected to generate.
The Eurodollar futures contract was launched in 1981. It was the first cash-settled futures contract. [13] It traded on the Chicago Mercantile Exchange. [14] Eurodollar futures were an instrument used to wager on Federal Reserve policy or to hedge the direction of short-term interest rates.
A short-term interest rate (STIR) future is a futures contract that derives its value from the interest rate at maturation. Common short-term interest rate futures are Eurodollar, Euribor, Euroyen, Short Sterling and Euroswiss, which are calculated on LIBOR at settlement, with the exception of Euribor which is based on Euribor and Euroyen which is based on TIBOR.
TED is an acronym formed from T-Bill and ED, the ticker symbol for the Eurodollar futures contract. Initially, the TED spread was the difference between the interest rates for three-month U.S. Treasuries contracts and the three-month Eurodollars contract as represented by the London Interbank Offered Rate (LIBOR).
Eurobond (external bond), a bond issued that is denominated in a currency not native to the country where it is issued Eurobond (eurozone) , proposed government bonds to be issued in euros jointly by the EU’s 19 eurozone states
Shibosai Bond, a private placement bond in the Japanese market with distribution limited to institutions and banks. Shogun bond, a non-yen-denominated bond issued in Japan by a non-Japanese institution or government [3] Bulldog bond, a pound sterling-denominated bond issued in London by a foreign institution or government. [4]
Yield to put (YTP): same as yield to call, but when the bond holder has the option to sell the bond back to the issuer at a fixed price on specified date. Yield to worst (YTW): when a bond is callable, puttable, exchangeable, or has other features, the yield to worst is the lowest yield of yield to maturity, yield to call, yield to put, and others.