Question

<!--td {border: 1px solid #ccc;}br {mso-data-placement:same-cell;}--> Consider the following statements with respect to masala bonds:

1. Bonds issued in the overseas market. ​

2.These are issued and repaid in rupee (rupee denominated). ​

3.The exchange rate risk is borne by the borrower.​

Choose the correct answer from below.

• A. 1 and 2 only.
• B. 1 and 3 only.
• C. 2 and 3 only.
• D. All of the above.

Answer 1

The correct option is A 1 and 2 only.

<!--td {border: 1px solid #ccc;}br {mso-data-placement:same-cell;}--> Statement 3 is incorrect.
The exchange rate risk is borne by the investor. ​Companies issuing Masala Bonds do not have to worry ​about rupee depreciation, which is usually ​a big worry while raising money in ​overseas markets.​