Question 1

A(n) _____ requires a corporation to repay a predetermined portion of the loan amount at regular intervals regardless of how much profit it is making.

Accepted Answer

A)  equity loan 
B)  stock loan 
C)  debt loan 
D)  bonded loan 
A)  equity loan 
B)  stock loan 
C)  debt loan 
D)  bonded loan

Question 2

Write a brief note on foreign exchange risks and the cost of capital.

Accepted Answer

A firm can borrow funds at a lower cost

Question 3

_____ deposits are regulated in most industrialized countries.

Accepted Answer

A)  U.S. currency 
B)  Domestic currency 
C)  Foreign currency 
D)  Eurocurrency 
A)  U.S. currency 
B)  Domestic currency 
C)  Foreign currency 
D)  Eurocurrency

Question 4

United States sells bonds that are denominated in dollars in Europe. This is an example of a(n) _____ bond.

Accepted Answer

A)  foreign 
B)  Euro 
C)  micro 
D)  regulatory 
A)  foreign 
B)  Euro 
C)  micro 
D)  regulatory

Question 5

By using the global capital market, investors have a much wider range of investment opportunities than in a purely domestic capital market.

Accepted Answer

A) True 
 B)False

Question 6

A factor that makes the Eurocurrency market attractive to both depositors and borrowers is:

Accepted Answer

A)  it allows fair trade within the European Union. 
B)  its strong government regulations and safeguards. 
C)  its commitment to economic growth in underdeveloped nations. 
D)  its lack of government regulation. 
A)  it allows fair trade within the European Union. 
B)  its strong government regulations and safeguards. 
C)  its commitment to economic growth in underdeveloped nations. 
D)  its lack of government regulation.

Question 7

Which of the following is a disadvantage of global capital market?

Accepted Answer

A)  Foreign investments may be driven by speculative flows in the market. 
B)  A truly global market reduces the liquidity of investments. 
C)  The availability of capital is low in a global capital market. 
D)  The cost of capital is more in a global market than a domestic market. 
A)  Foreign investments may be driven by speculative flows in the market. 
B)  A truly global market reduces the liquidity of investments. 
C)  The availability of capital is low in a global capital market. 
D)  The cost of capital is more in a global market than a domestic market.

Question 8

The cost of capital is the:

Accepted Answer

A)  interest received on investments made by the company. 
B)  price of borrowing money. 
C)  difference between cost of inputs and outputs. 
D)  total value of raw materials that a company uses. 
A)  interest received on investments made by the company. 
B)  price of borrowing money. 
C)  difference between cost of inputs and outputs. 
D)  total value of raw materials that a company uses.

Question 9

An integrated international capital market is _____ compared to a nonintegrated market.

Accepted Answer

A)  highly volatile 
B)  more shock-proof 
C)  less volatile 
D)  less resistant to change 
A)  highly volatile 
B)  more shock-proof 
C)  less volatile 
D)  less resistant to change

Question 10

An equity loan is made when:

Accepted Answer

A)  a corporation pledge equities or other assets to borrow money. 
B)  corporations avail cash loans from individuals. 
C)  a corporation sells stock to investors. 
D)  corporations issue bonds to individual investors. 
A)  a corporation pledge equities or other assets to borrow money. 
B)  corporations avail cash loans from individuals. 
C)  a corporation sells stock to investors. 
D)  corporations issue bonds to individual investors.

Question 11

Systematic risk refers to:

Accepted Answer

A)  movements in a stock portfolio's value that are attributable to macroeconomic forces affecting all firms in an economy. 
B)  the level of diversifiable risk in an economy. 
C)  movements in a stock portfolio's value that are attributable to microeconomic forces affecting the specific firms invested in. 
D)  the microeconomic forces that affect rates of return on investments. 
A)  movements in a stock portfolio's value that are attributable to macroeconomic forces affecting all firms in an economy. 
B)  the level of diversifiable risk in an economy. 
C)  movements in a stock portfolio's value that are attributable to microeconomic forces affecting the specific firms invested in. 
D)  the microeconomic forces that affect rates of return on investments.

Question 12

Investors who purchase a fixed-rate bond receive:

Accepted Answer

A)  incremental payouts until the bonded money runs out. 
B)  cash payoffs only at maturity. 
C)  a full cash payoff on demand. 
D)  a fixed set of cash payoffs. 
A)  incremental payouts until the bonded money runs out. 
B)  cash payoffs only at maturity. 
C)  a full cash payoff on demand. 
D)  a fixed set of cash payoffs.

Question 13

What are the drawbacks of the Eurocurrency market?

Accepted Answer

The Eurocurrency market has two drawback

Question 14

Which of the following statements is true of the deregulation of financial industry?

Accepted Answer

A)  Countries can strengthen the global capital market by encouraging strict regulations. 
B)  Financial services have historically been the most deregulated of all industries. 
C)  Deregulation helped the development of an international capital market. 
D)  Deregulation compels financial services companies to remain as domestic companies. 
A)  Countries can strengthen the global capital market by encouraging strict regulations. 
B)  Financial services have historically been the most deregulated of all industries. 
C)  Deregulation helped the development of an international capital market. 
D)  Deregulation compels financial services companies to remain as domestic companies.

Question 15

Eurobonds are:

Accepted Answer

A)  denominated in the currency of the country in which they are issued. 
B)  normally underwritten by an international syndicate of banks. 
C)  denominated in a currency that is accepted by the European Union. 
D)  sold outside the borrower's county with reference to the originating currency. 
A)  denominated in the currency of the country in which they are issued. 
B)  normally underwritten by an international syndicate of banks. 
C)  denominated in a currency that is accepted by the European Union. 
D)  sold outside the borrower's county with reference to the originating currency.

Question 16

Companies receive a _____ when using the Eurocurrency market.

Accepted Answer

A)  lower interest rate on deposits and pay more for loans 
B)  tax incentives 
C)  higher interest rate on deposits and pay less for loans 
D)  liquid asset reserve waiver 
A)  lower interest rate on deposits and pay more for loans 
B)  tax incentives 
C)  higher interest rate on deposits and pay less for loans 
D)  liquid asset reserve waiver

Question 17

Investors are able to reduce risks by diversifying an investment portfolio internationally, and the risk reduction effects would be greater if not for:

Accepted Answer

A)  volatile exchange rates associated with the current floating exchange risk regime. 
B)  the different kinds of tax regimes in different countries. 
C)  the inaccessibility of foreign stock exchanges to most investors. 
D)  the poor quality of many stocks in international start-up firms. 
A)  volatile exchange rates associated with the current floating exchange risk regime. 
B)  the different kinds of tax regimes in different countries. 
C)  the inaccessibility of foreign stock exchanges to most investors. 
D)  the poor quality of many stocks in international start-up firms.

Question 18

The spread between the Eurocurrency deposit rate and the Eurocurrency lending rate is more than the spread between the domestic deposit and lending rates.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is a disadvantage of the integration facilitated by technology?

Accepted Answer

A)  Segregated international capital markets will emerge as a result of technology. 
B)  Complexity in processing large volumes of data will increase. 
C)  Shocks that occur in one financial center will spread globally. 
D)  Systems integration hinders real-time data transfer across different countries. 
A)  Segregated international capital markets will emerge as a result of technology. 
B)  Complexity in processing large volumes of data will increase. 
C)  Shocks that occur in one financial center will spread globally. 
D)  Systems integration hinders real-time data transfer across different countries.

Question 20

Briefly describe the trends observed in the global deregulation of financial services.

Accepted Answer

In country after country, financial serv

A(n) _____ requires a corporation to repay a predetermined portion of the loan amount at regular intervals regardless of how much profit it is making.

Write a brief note on foreign exchange risks and the cost of capital.

_____ deposits are regulated in most industrialized countries.

United States sells bonds that are denominated in dollars in Europe. This is an example of a(n) _____ bond.

By using the global capital market, investors have a much wider range of investment opportunities than in a purely domestic capital market.

A factor that makes the Eurocurrency market attractive to both depositors and borrowers is:

Which of the following is a disadvantage of global capital market?

The cost of capital is the:

An integrated international capital market is _____ compared to a nonintegrated market.

An equity loan is made when:

Systematic risk refers to:

Investors who purchase a fixed-rate bond receive:

What are the drawbacks of the Eurocurrency market?

Which of the following statements is true of the deregulation of financial industry?

Eurobonds are:

Companies receive a _____ when using the Eurocurrency market.

Investors are able to reduce risks by diversifying an investment portfolio internationally, and the risk reduction effects would be greater if not for:

The spread between the Eurocurrency deposit rate and the Eurocurrency lending rate is more than the spread between the domestic deposit and lending rates.

Which of the following is a disadvantage of the integration facilitated by technology?

Briefly describe the trends observed in the global deregulation of financial services.

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

A(n) _____ requires a corporation to repay a predetermined portion of the loan amount at regular intervals regardless of how much profit it is making.

Write a brief note on foreign exchange risks and the cost of capital.

_____ deposits are regulated in most industrialized countries.

United States sells bonds that are denominated in dollars in Europe. This is an example of a(n) _____ bond.

By using the global capital market, investors have a much wider range of investment opportunities than in a purely domestic capital market.

A factor that makes the Eurocurrency market attractive to both depositors and borrowers is:

Which of the following is a disadvantage of global capital market?

The cost of capital is the:

An integrated international capital market is _____ compared to a nonintegrated market.

An equity loan is made when:

Systematic risk refers to:

Investors who purchase a fixed-rate bond receive:

What are the drawbacks of the Eurocurrency market?

Which of the following statements is true of the deregulation of financial industry?

Eurobonds are:

Companies receive a _____ when using the Eurocurrency market.

Investors are able to reduce risks by diversifying an investment portfolio internationally, and the risk reduction effects would be greater if not for:

The spread between the Eurocurrency deposit rate and the Eurocurrency lending rate is more than the spread between the domestic deposit and lending rates.

Which of the following is a disadvantage of the integration facilitated by technology?

Briefly describe the trends observed in the global deregulation of financial services.

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