Eurodollar bonds are dollar-denominated bonds sold outside the United States.

• A. Dollar-denominated bonds sold inside the United States
• B. Dollar-denominated bonds sold outside the United States
• C. Euro-denominated bonds issued in Europe
• D. U.S. Treasury securities

Answer: (B)

Eurodollar bonds are dollar-denominated bonds issued outside the United States. The defining feature is the currency (U.S. dollars) combined with offshore issuance, not the geographic location or the currency other than the dollar. These bonds can be issued by foreign or offshore issuers seeking dollar funding in markets outside the U.S., which is why they’re described as dollar-denominated and offshore. They’re not Euro-denominated bonds, which would use the euro as the currency. U.S. Treasury securities are a separate category issued by the U.S. government and aren’t referred to as Eurodollars.