Exam 5: Foreign Investment

Choice-of-law clause promises foreign investors that the host government will not change its tax for a certain period of time.

A(n) ________ is a person, such as a corporate officer, director, or majority shareholder, who has access to material nonpublic information about a company or the securities market.

Explain appraisal rights.

A(n) ________ is a contractual obligation of a company to repay the holder the amount of his or her original investment plus interest at a specified future date.

The largest free zones are called ________.

Depository receipts are non-negotiable instruments.

A bond is an equity security.

Depriving a person or company of private property without compensation is called nationalization.

A debt security represents an ownership interest in a business.

A(n) ________ is someone who buys in good faith, pays value, and is unaware that the transferor is not the rightful owner.

Which of the following is true of a certificated security?

A ________ is a share in the ownership of a company that entitles its owner to rights in the company, including a proportionate part of the dividends and, upon liquidation, of the capital assets.

Differentiate between closed sectors and restricted sectors.

Euroclear is an international clearinghouse.

________ promise foreign investors that the host government will not change its tax, foreign exchange, or other legal régime for a certain period of time, or that changes subsequent to the establishment of an enterprise will not affect that enterprise.

The parts of a state's economy that are not fully open to foreign investors are called ________.

Which of the following statements is most likely to be true regarding the supervision of foreign investment?

Manufacturing activities are allowed in bonded warehouses.

A ________ is a negotiable instrument issued by a bank that represents a foreign company's publicly traded securities and that, in turn, is traded on a local securities exchange.

The clearance and settlement procedure is uniform throughout the world.