CFA Latest CFA Level 1 Discussions Question of the Week – Fixed Income

Question of the Week – Fixed Income

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    • AdaptPrep
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      The Kenyan government issues two new series of 10-year optionless bonds. They are completely identical, except that one is denominated in Kenyan Shillings (KES) and the other in British Pounds (GBP). Which offering will most likely be given a higher rating by Moody’s?

      • Kenyan Shillings
      • British Pounds
      • Both will be the same
    • AdaptPrep
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      It is more risky for a government to pay off a debt in a
      foreign currency than in their own. The Kenyan government could pay off its KES
      issue off by printing new money. A KES
      issue will be given a higher credit rating, though British investors may
      experience high currency risk.

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