Question 1

Cross-listing is a process when:

Accepted Answer

A)  bonds and shares of the same company sold as a package. 
B)  shares of two or more companies are sold as a package. 
C)  shares of the same company are sold on different stock exchanges in different countries. 
D)  shares of different companies are sold on different stock exchanges of a particular country. 
A)  bonds and shares of the same company sold as a package. 
B)  shares of two or more companies are sold as a package. 
C)  shares of the same company are sold on different stock exchanges in different countries. 
D)  shares of different companies are sold on different stock exchanges of a particular country. C

Question 2

All of the following are required criteria for a listing of a non-US company on the NYSE EXCEPT:

Accepted Answer

A)  The number of publicly traded shares should be at least 2.5 million. 
B)  Global Market Capitalization is at least $500 million. 
C)  Annual revenue is at least $100 million. 
D)  pre-tax income is at least $50 million. 
A)  The number of publicly traded shares should be at least 2.5 million. 
B)  Global Market Capitalization is at least $500 million. 
C)  Annual revenue is at least $100 million. 
D)  pre-tax income is at least $50 million. D

Question 3

In the London market, Rolls Royce stock closed at £0.875 per share on Thursday, April 17, 2003. Rolls Royce trades as an ADR in the OTC in the United States. Five underlying Rolls Royce shares are packaged into one ADR. On April, 17, 2003, the British Pound sterling to the U.S. spot exchange rate was £0.6366/$1.00.
-If the Rolls Royce ADRs were trading at $5.75 when the underlying shares were trading in London at £0.875,ignoring transaction costs,the arbitrage trading profit would be:

Accepted Answer

A)  $0.00. 
B)  $1.12. 
C)  $2.12. 
D)  $3.12. 
A)  $0.00. 
B)  $1.12. 
C)  $2.12. 
D)  $3.12. B

Question 4

The functions of the secondary market are all except:

Accepted Answer

A)  provide liquidity for investors. 
B)  price determination for traded securities. 
C)  provide price signals. 
D)  provide sell signals. 
A)  provide liquidity for investors. 
B)  price determination for traded securities. 
C)  provide price signals. 
D)  provide sell signals.

Question 5

What factors go into the decision to cross-list on a foreign exchange?

Accepted Answer

When deciding whether to cross-list shar

Question 6

Which ADRs are listed on a US exchange?

Accepted Answer

A)  Level I only 
B)  Level I and II only 
C)  Level II and III only 
D)  Level III only 
A)  Level I only 
B)  Level I and II only 
C)  Level II and III only 
D)  Level III only

Question 7

Shares trade on foreign exchanges in all of the following forms except:

Accepted Answer

A)  American depository receipts. 
B)  Global depository receipts. 
C)  American registered shares. 
D)  Global registered shares. 
A)  American depository receipts. 
B)  Global depository receipts. 
C)  American registered shares. 
D)  Global registered shares.

Question 8

Which of the following statements is true?

Accepted Answer

A)  In the primary market, firms sell shares to investors and in the secondary market investors sell shares to investors. 
B)  In the primary market, investors sell shares to investors and in the secondary market firms sell shares to investors. 
C)  In the primary market, firms sell shares to investors for the first time and in the secondary market firms sell shares to investors in subsequent equity issues. 
D)  In the primary market, investors sell shares to investors for the first time and in the secondary market investors sell shares to investors after the initial sale. 
A)  In the primary market, firms sell shares to investors and in the secondary market investors sell shares to investors. 
B)  In the primary market, investors sell shares to investors and in the secondary market firms sell shares to investors. 
C)  In the primary market, firms sell shares to investors for the first time and in the secondary market firms sell shares to investors in subsequent equity issues. 
D)  In the primary market, investors sell shares to investors for the first time and in the secondary market investors sell shares to investors after the initial sale.

Question 9

American Depository Receipts have all of the following characteristics except:

Accepted Answer

A)  They are bearer shares. 
B)  They are quoted in US dollars. 
C)  Dividends on ADRs are paid in US dollars. 
D)  ADR trades clear in three business days. 
A)  They are bearer shares. 
B)  They are quoted in US dollars. 
C)  Dividends on ADRs are paid in US dollars. 
D)  ADR trades clear in three business days.

Question 10

In the London market, Rolls Royce stock closed at £0.875 per share on Thursday, April 17, 2003. Rolls Royce trades as an ADR in the OTC in the United States. Five underlying Rolls Royce shares are packaged into one ADR. On April, 17, 2003, the British Pound sterling to the U.S. spot exchange rate was £0.6366/$1.00.
-The major national stock market index for the Tokyo stock exchange is the

Accepted Answer

A)  FTSE 100 
B)  DAX 
C)  Hang Seng 
D)  Nikkei 225 
A)  FTSE 100 
B)  DAX 
C)  Hang Seng 
D)  Nikkei 225

Question 11

In the London market, Rolls Royce stock closed at £0.875 per share on Thursday, April 17, 2003. Rolls Royce trades as an ADR in the OTC in the United States. Five underlying Rolls Royce shares are packaged into one ADR. On April, 17, 2003, the British Pound sterling to the U.S. spot exchange rate was £0.6366/$1.00.
-Assume Nestle is trading for SF200 in Zurich and Nestle ADRs (4 ADRs per share)are trading for $40 on the New York Stock exchange.There is no arbitrage possible.What is the current SF/US$ exchange rate?

Accepted Answer

A)  SF 0.8/$ 
B)  SF 1/$ 
C)  SF 1.25/$ 
D)  SF 4/$ 
A)  SF 0.8/$ 
B)  SF 1/$ 
C)  SF 1.25/$ 
D)  SF 4/$

Question 12

In the London market, Rolls Royce stock closed at £0.875 per share on Thursday, April 17, 2003. Rolls Royce trades as an ADR in the OTC in the United States. Five underlying Rolls Royce shares are packaged into one ADR. On April, 17, 2003, the British Pound sterling to the U.S. spot exchange rate was £0.6366/$1.00.
-The no arbitrage U.S.price of one ADR is:

Accepted Answer

A)  $4.87. 
B)  $5.87. 
C)  $6.87. 
D)  $7.87. 
A)  $4.87. 
B)  $5.87. 
C)  $6.87. 
D)  $7.87.

Question 13

A market in which investors can buy and sell shares quickly at the price close to the current quoted price is called:

Accepted Answer

A)  Efficient market. 
B)  Liquid market. 
C)  Regulated market. 
D)  Optimal market. 
A)  Efficient market. 
B)  Liquid market. 
C)  Regulated market. 
D)  Optimal market.

Question 14

When deciding whether to cross-list shares on a foreign exchange, the firm has to consider the expected benefits and costs. The benefits may be: to establish a broader investor base for its stock, to establish name recognition in foreign capital markets, thus paving the way for the firm to source new equity and debt capital from investors in different markets, and to expose the firm's name to a broader investor and consumer groups. The costs include: listing fees, reconciliation of the accounting standards of two countries, compliance with the regulations of the foreign exchange, and investor relations.
-Assume that Accor shares are trading at A$2.5 in Sydney and $28 in New York.Each ADR equals 20 shares.The current exchange rate is A$1.5/$.At what transaction cost per share would there be no profit opportunity?

Accepted Answer

A$8/20 = A$0.4
Buy one ADR in

Question 15

A measure of "liquidity" for a stock market is:

Accepted Answer

A)  the debt turnover ratio. 
B)  the ratio of stock market transactions, plus the size divided by a period of time. 
C)  the LIBOR rate. 
D)  the ratio of stock market transactions over a period of time divided by the size, or market capitalization, of the stock market. 
A)  the debt turnover ratio. 
B)  the ratio of stock market transactions, plus the size divided by a period of time. 
C)  the LIBOR rate. 
D)  the ratio of stock market transactions over a period of time divided by the size, or market capitalization, of the stock market.

Question 16

In the London market, Rolls Royce stock closed at £0.875 per share on Thursday, April 17, 2003. Rolls Royce trades as an ADR in the OTC in the United States. Five underlying Rolls Royce shares are packaged into one ADR. On April, 17, 2003, the British Pound sterling to the U.S. spot exchange rate was £0.6366/$1.00.
-Assume that Nestle shares are trading at SF 300 in Zurich and $51 in New York.Each share equals 4 ADRs.The current exchange rate is SF1.5/$.In the absence of transaction costs,can you make an arbitrage profit?

Accepted Answer

Yes.Buy one share in Zurich fo

Question 17

In the London market, Rolls Royce stock closed at £0.875 per share on Thursday, April 17, 2003. Rolls Royce trades as an ADR in the OTC in the United States. Five underlying Rolls Royce shares are packaged into one ADR. On April, 17, 2003, the British Pound sterling to the U.S. spot exchange rate was £0.6366/$1.00.
-Assume that Nestle shares are trading at SF 300 in Zurich and $51 in New York.Each share equals 4 ADRs.The current exchange rate is SF1.5/$.If transaction costs are $1 per ADR,can you make an arbitrage profit?

Accepted Answer

No,transaction costs = potential profit

Question 18

American Depository Receipt (ADRs)represents foreign stocks:

Accepted Answer

A)  denominated in U.S. dollars that trade on European stock exchanges. 
B)  denominated in U.S. dollars that trade on a U.S. stock exchange or in the over-the-counter market. 
C)  denominated in a foreign currency that trade on a U.S. stock exchange. 
D)  non-registered (bearer) securities. 
A)  denominated in U.S. dollars that trade on European stock exchanges. 
B)  denominated in U.S. dollars that trade on a U.S. stock exchange or in the over-the-counter market. 
C)  denominated in a foreign currency that trade on a U.S. stock exchange. 
D)  non-registered (bearer) securities.

Question 19

A primary equity market is:

Accepted Answer

A)  the equity market in home country of a corporation. 
B)  the equity market in which most of the company's shares are traded. 
C)  the process by which the firm issues its first publicly traded shares. 
D)  the U.S. equity market. 
A)  the equity market in home country of a corporation. 
B)  the equity market in which most of the company's shares are traded. 
C)  the process by which the firm issues its first publicly traded shares. 
D)  the U.S. equity market.

Question 20

What/who is Euronext N.V.?

Accepted Answer

A)  President of the Eurobank 
B)  Vice-president of the Eurobank 
C)  Stock Exchange 
D)  Stock Index 
A)  President of the Eurobank 
B)  Vice-president of the Eurobank 
C)  Stock Exchange 
D)  Stock Index

Cross-listing is a process when:

All of the following are required criteria for a listing of a non-US company on the NYSE EXCEPT:

The functions of the secondary market are all except:

What factors go into the decision to cross-list on a foreign exchange?

Which ADRs are listed on a US exchange?

Shares trade on foreign exchanges in all of the following forms except:

Which of the following statements is true?

American Depository Receipts have all of the following characteristics except:

A market in which investors can buy and sell shares quickly at the price close to the current quoted price is called:

A measure of "liquidity" for a stock market is:

American Depository Receipt (ADRs)represents foreign stocks:

A primary equity market is:

What/who is Euronext N.V.?

Globalization and the Multinational Firm

International Monetary System

Balance of Payments

The Market for Foreign Exchange

International Parity Relationships and Forecasting Foreign Exchange Rates

International Banking and Money Market

International Bond Market

Futures and Options on Foreign Exchange

Interest Rate and Currency Swaps

International Portfolio Investment

Management of Economic Exposure

Management of Transaction Exposure

Management of Translation Exposure

Foreign Direct Investment and Cross-Border Acquisitions

International Capital Structure and the Cost of Capital

International Capital Budgeting

Multinational Cash Management

Exports and Imports

International Tax Environment

Corporate Governance Around the World

Filters

Exam 8: International Equity Markets

Cross-listing is a process when:

All of the following are required criteria for a listing of a non-US company on the NYSE EXCEPT:

The functions of the secondary market are all except:

What factors go into the decision to cross-list on a foreign exchange?

Which ADRs are listed on a US exchange?

Shares trade on foreign exchanges in all of the following forms except:

Which of the following statements is true?

American Depository Receipts have all of the following characteristics except:

A market in which investors can buy and sell shares quickly at the price close to the current quoted price is called:

A measure of "liquidity" for a stock market is:

American Depository Receipt (ADRs)represents foreign stocks:

A primary equity market is:

What/who is Euronext N.V.?

Globalization and the Multinational Firm

International Monetary System

Balance of Payments

The Market for Foreign Exchange

International Parity Relationships and Forecasting Foreign Exchange Rates

International Banking and Money Market

International Bond Market

Futures and Options on Foreign Exchange

Interest Rate and Currency Swaps

International Portfolio Investment

Management of Economic Exposure

Management of Transaction Exposure

Management of Translation Exposure

Foreign Direct Investment and Cross-Border Acquisitions

International Capital Structure and the Cost of Capital

International Capital Budgeting

Multinational Cash Management

Exports and Imports

International Tax Environment

Corporate Governance Around the World

Filters