Dollar-denominated securities what are they?
Answer:
Your first question is not very clear. All listed stocks in the US are dollar denominated.
Your second question:
"When other countries buy dollar-denominated securities, what does that term mean? It means that if a French company or person wants to buy stock, they have to exchange their French Francs for Dollars to buy "Dollar denominated stocks."
How does it effect the securites if the country decides to reduce it's holdings of these." So what happens when a "country" decides to sell? First of all, not many "countries" or governments, speculate in the stock market. They do buy debt intstruments and other interest-bearing bonds, whatever. For example, it would be illegal for our gov't to speculate and gamble with taxpayers money.
But if another "country" did own stock it would be no different than a large Mutual Fund liquidating a million dollars worth of stock; the market would likely go down a miniscule amount, then continue whatever it was doing. It would be like a news event that causes volatility. Looking back, it would be a mere blip on the screen, hardly significant.
Almost all securities traded in the US are dollar denominated.
Are you talking foreign markets?
In Mexico, securities are denominated in Pesos Mexicanos.
In Canada, securities are denominated in Canadian Dollars.
In the United States of America, securities are denominates in United States of America Dollars.
A Security is a Stock or Share.
A dollar denominated security is one where:
1. You pay for it with dollars
2. When you sell it, you get dollars.
3. Any dividends or interest payments are in dollars.
Most US securities are dollar denominated. Some foreign securities are dollar denominated. For example, Eurodollar Deposits are essentially certificates of US Dollar deposits in foreign banks. You pay for them in dollars, you get dollars back when they mature.
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