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Characteristics of Composite currency bonds

State the characteristics of the Composite currency bonds market instrument.

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A Composite currency bonds are denominated in currency basket, like SDRs or ECUs, rather than a single currency.  They are consequently known as currency cocktail bonds.  They are usually straight fixed-rate bonds. Currency composite is the portfolio of currencies: when some currencies are depreciating others may be appreciating, hence, producing lower variability overall.

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