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Questions and Answers
What is a Foreign Currency Convertible Bond (FCCB)?
What is a Foreign Currency Convertible Bond (FCCB)?
- A quasi-debt instrument issued in a currency other than the issuer’s domestic currency (correct)
- A traditional debt instrument issued in the issuer's domestic currency
- An equity instrument issued in the issuer's domestic currency
- An instrument that can only be redeemed in the issuer's domestic currency
What is a characteristic of FCCBs?
What is a characteristic of FCCBs?
- They are exclusively issued by Indian companies
- They provide an option to convert the bonds into equity (correct)
- They have a fixed interest rate and no option for redemption
- They can only be issued in the issuer's domestic currency
What is the purpose of FCCBs for issuers?
What is the purpose of FCCBs for issuers?
- Restricting capital flow from foreign markets
- Accessing capital available in foreign markets (correct)
- Minimizing presence in the international market
- Avoiding international investors
What is a possible feature of FCCBs?
What is a possible feature of FCCBs?
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