What are sovereign bonds ........

Economic Affairs Financial Markets

What are sovereign bonds?

Sovereign bonds are bonds held by sovereign countries which can be traded as foreign exchange.

Sovereign bonds are debt security issued by a national government within a given country and denominated in a national currency.

Sovereign bonds are debt security issued by private sector within a given country and denominated in a foreign currency.

Sovereign bonds are bonds floated by sovereign countries in any currency which can be freely traded in the open market.

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Explanation:

The most accurate option to describe sovereign bonds is:

Option 2: Sovereign bonds are debt security issued by a national government within a given country and denominated in a national currency.

This option correctly defines sovereign bonds as debt securities issued by a government, typically denominated in the country’s own currency. While sovereign bonds can also be issued in foreign currencies (as suggested in other options), the primary definition generally refers to bonds issued in the national currency.