Question 1

Which of the following statements is true of debt loans?

Accepted Answer

A)  Management has the discretion in paying the amount to investors. 
B)  Debt loans should be repaid at regular intervals. 
C)  Returns from debt loans are variable in nature. 
D)  Corporations need not pay back the debt loans if they incur losses. 
A)  Management has the discretion in paying the amount to investors. 
B)  Debt loans should be repaid at regular intervals. 
C)  Returns from debt loans are variable in nature. 
D)  Corporations need not pay back the debt loans if they incur losses.

Question 2

Hedge funds:

Accepted Answer

A)  are public investment funds that invest in corporate bonds and shares. 
B)  make long bets rather than short bets. 
C)  are investment funds managed by the government. 
D)  make short bets on assets that they think will decline in value. 
A)  are public investment funds that invest in corporate bonds and shares. 
B)  make long bets rather than short bets. 
C)  are investment funds managed by the government. 
D)  make short bets on assets that they think will decline in value.

Question 3

Explain how equity loans and debt loans differ in terms of attractiveness to businesses.

Accepted Answer

Investors purchase stock both for their

Question 4

_____ refers to the movements in a stock portfolio's value that are attributable to macroeconomic forces affecting all firms in an economy.

Accepted Answer

A)  Diversification 
B)  Capital flow 
C)  Systematic risk 
D)  Correlation movement 
A)  Diversification 
B)  Capital flow 
C)  Systematic risk 
D)  Correlation movement

Question 5

When the value of U.S. dollars goes down:

Accepted Answer

A)  bonds that are denominated in dollar will produce more returns. 
B)  foreign depositors in the U.S will benefit. 
C)  foreign borrowers will garner benefits. 
D)  investors tend to favor bonds that are denominated in dollar. 
A)  bonds that are denominated in dollar will produce more returns. 
B)  foreign depositors in the U.S will benefit. 
C)  foreign borrowers will garner benefits. 
D)  investors tend to favor bonds that are denominated in dollar.

Question 6

Investors can reduce the level of risk by diversifying a portfolio internationally.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is true of the Eurobond market?

Accepted Answer

A)  There is a great deal of regulatory interference. 
B)  Government limitations are generally more stringent for securities denominated in foreign currencies. 
C)  There are less stringent disclosure requirements than in most domestic bond markets. 
D)  They have an unfavorable tax status. 
A)  There is a great deal of regulatory interference. 
B)  Government limitations are generally more stringent for securities denominated in foreign currencies. 
C)  There are less stringent disclosure requirements than in most domestic bond markets. 
D)  They have an unfavorable tax status.

Question 8

Eurobonds fall within the regulatory domain of European Economic Community.

Accepted Answer

A) True 
 B)False

Question 9

Market makers are:

Accepted Answer

A)  financial service companies that connect investors and borrowers. 
B)  nonbank financial institutions who want to invest money. 
C)  high net worth individuals with surplus cash to reinvest. 
D)  those who want to borrow money including individuals, companies, and governments. 
A)  financial service companies that connect investors and borrowers. 
B)  nonbank financial institutions who want to invest money. 
C)  high net worth individuals with surplus cash to reinvest. 
D)  those who want to borrow money including individuals, companies, and governments.

Question 10

According to some analysts, deregulation and reduced controls on cross-border capital flows are:

Accepted Answer

A)  having a stabilizing effect on national economies. 
B)  making individual nations more vulnerable to speculative capital flows. 
C)  making investors nervous and causing them to pull their money out of foreign nations. 
D)  allowing undeveloped nations to enter the global market. 
A)  having a stabilizing effect on national economies. 
B)  making individual nations more vulnerable to speculative capital flows. 
C)  making investors nervous and causing them to pull their money out of foreign nations. 
D)  allowing undeveloped nations to enter the global market.

Question 11

What are the advantages of global capital market in comparison with a purely domestic capital market?

Accepted Answer

In a purely domestic capital market, the

Question 12

The element of risk into investing in foreign assets is more with _____ exchange rates.

Accepted Answer

A)  floating 
B)  pegged 
C)  fixed 
D)  managed 
A)  floating 
B)  pegged 
C)  fixed 
D)  managed

Question 13

Explain the changes observed in the risk of investments when an investor increases the number of stocks in her portfolio.

Accepted Answer

As an investor increases the number of s

Question 14

How does the growth in the global capital markets affect investing firms?

Accepted Answer

On the investment side, the growth of th

Question 15

Which of the following is a factor that makes Eurobonds more attractive than most major domestic bonds?

Accepted Answer

A)  Presence of a regulatory interference 
B)  Strong disclosure requirements 
C)  Favorable tax status 
D)  Protection from exchange risks 
A)  Presence of a regulatory interference 
B)  Strong disclosure requirements 
C)  Favorable tax status 
D)  Protection from exchange risks

Question 16

The cost of capital is:

Accepted Answer

A)  higher in a purely domestic capital market than in a global market. 
B)  lower in a domestic capital market than in an international market. 
C)  higher in a global market than in a purely domestic capital market. 
D)  the same in either a global market or a purely domestic capital market. 
A)  higher in a purely domestic capital market than in a global market. 
B)  lower in a domestic capital market than in an international market. 
C)  higher in a global market than in a purely domestic capital market. 
D)  the same in either a global market or a purely domestic capital market.

Question 17

Which of the following statements is true of Eurocurrency?

Accepted Answer

A)  Eurocurrency market is a relatively high-cost source of funds. 
B)  It is produced and banked within European countries. 
C)  Eurocurrency can be created anywhere in the world. 
D)  It is used only for internal transactions within European Union. 
A)  Eurocurrency market is a relatively high-cost source of funds. 
B)  It is produced and banked within European countries. 
C)  Eurocurrency can be created anywhere in the world. 
D)  It is used only for internal transactions within European Union.

Question 18

Economist Martin Feldstein has coined the term "hot money" to pertain to long-term capital flows.

Accepted Answer

A) True 
 B)False

Question 19

A Eurocurrency is:

Accepted Answer

A)  the currency used by the countries of the European Union. 
B)  the currency formerly used in many European countries before the formation of the European Union and the institution of the euro. 
C)  any currency banked outside of its country of origin. 
D)  any currency banked within a European country. 
A)  the currency used by the countries of the European Union. 
B)  the currency formerly used in many European countries before the formation of the European Union and the institution of the euro. 
C)  any currency banked outside of its country of origin. 
D)  any currency banked within a European country.

Question 20

Which of the following is an advantage that banks have when they deal with foreign currencies?

Accepted Answer

A)  Interest payments to customers are low when dealing with foreign currencies. 
B)  Accounts need not be maintained when dealing with foreign currencies. 
C)  Risks that investors face are low when dealing with foreign currencies. 
D)  Governments give banks more freedom when dealing with foreign currencies. 
A)  Interest payments to customers are low when dealing with foreign currencies. 
B)  Accounts need not be maintained when dealing with foreign currencies. 
C)  Risks that investors face are low when dealing with foreign currencies. 
D)  Governments give banks more freedom when dealing with foreign currencies.

Which of the following statements is true of debt loans?

Hedge funds:

Explain how equity loans and debt loans differ in terms of attractiveness to businesses.

_____ refers to the movements in a stock portfolio's value that are attributable to macroeconomic forces affecting all firms in an economy.

When the value of U.S. dollars goes down:

Investors can reduce the level of risk by diversifying a portfolio internationally.

Which of the following is true of the Eurobond market?

Eurobonds fall within the regulatory domain of European Economic Community.

Market makers are:

According to some analysts, deregulation and reduced controls on cross-border capital flows are:

What are the advantages of global capital market in comparison with a purely domestic capital market?

The element of risk into investing in foreign assets is more with _____ exchange rates.

Explain the changes observed in the risk of investments when an investor increases the number of stocks in her portfolio.

How does the growth in the global capital markets affect investing firms?

Which of the following is a factor that makes Eurobonds more attractive than most major domestic bonds?

The cost of capital is:

Which of the following statements is true of Eurocurrency?

Economist Martin Feldstein has coined the term "hot money" to pertain to long-term capital flows.

A Eurocurrency is:

Which of the following is an advantage that banks have when they deal with foreign currencies?

Globalization

National Differences in Political Economy, and Legal Systems

National Differences in Economic Development

Differences in Culture

Ethics, Corporate Social Responsibility, and Sustainability

International Trade Theory

Government Policy and International Trade

Foreign Direct Investment

Regional Trade Pacts Give the Mexican Auto Industry an Edge

The Foreign Exchange Market

The International Monetary System

The Strategy of International Business

The Organization of International Business

Entry Strategy and Strategic Alliances

Exporting, Importing, and Countertrade

Global Production and Supply Chain Management

Global Marketing and RD

Global Human Resource Management

Accounting and Finance in the International Business

Filters

Exam 12: The Global Capital Market

Which of the following statements is true of debt loans?

Hedge funds:

Explain how equity loans and debt loans differ in terms of attractiveness to businesses.

_____ refers to the movements in a stock portfolio's value that are attributable to macroeconomic forces affecting all firms in an economy.

When the value of U.S. dollars goes down:

Investors can reduce the level of risk by diversifying a portfolio internationally.

Which of the following is true of the Eurobond market?

Eurobonds fall within the regulatory domain of European Economic Community.

Market makers are:

According to some analysts, deregulation and reduced controls on cross-border capital flows are:

What are the advantages of global capital market in comparison with a purely domestic capital market?

The element of risk into investing in foreign assets is more with _____ exchange rates.

Explain the changes observed in the risk of investments when an investor increases the number of stocks in her portfolio.

How does the growth in the global capital markets affect investing firms?

Which of the following is a factor that makes Eurobonds more attractive than most major domestic bonds?

The cost of capital is:

Which of the following statements is true of Eurocurrency?

Economist Martin Feldstein has coined the term "hot money" to pertain to long-term capital flows.

A Eurocurrency is:

Which of the following is an advantage that banks have when they deal with foreign currencies?

Globalization

National Differences in Political Economy, and Legal Systems

National Differences in Economic Development

Differences in Culture

Ethics, Corporate Social Responsibility, and Sustainability

International Trade Theory

Government Policy and International Trade

Foreign Direct Investment

Regional Trade Pacts Give the Mexican Auto Industry an Edge

The Foreign Exchange Market

The International Monetary System

The Strategy of International Business

The Organization of International Business

Entry Strategy and Strategic Alliances

Exporting, Importing, and Countertrade

Global Production and Supply Chain Management

Global Marketing and RD

Global Human Resource Management

Accounting and Finance in the International Business

Filters