Exam 19: International Securities Markets

The data show that several markets such as the United States and Britain continually outperform the other developed markets such as Canada, Switzerland, and Japan.

International diversification will provide low risk when the investor finds international securities having a compound rate of return equal to that of the United States and a correlation coefficient close to that of the United States portfolio.

When looking at the list of countries in the emerging market list,

The currency crisis in South Asia caused a big decrease in the value of South Asian countries' market values between 1996 and 2002.

Indirect means of participating in foreign investments include purchasing:

Methods of indirect international investment include all of the following except:

The main problem associated with the taxation of foreign investors is:

All of the following are obstacles to foreign investing, except:

Emerging markets often have market structures similar to those in the developed world and trade their securities in a continuous auction market.

Which of the following statements about the information available on publicly traded foreign firms is NOT true?

The market capitalization of General Electric, Microsoft, and Exxon combined would rank ahead of any emerging market's capitalization, including China in 2005.

Political risk can best be effectively reduced or eliminated by investing only in companies of European countries.

Foreign exchange risk is not a major concern to international investors because there have been fewer wide swings in currency values in recent years.

Correlations of foreign stock market movements to U.S. stock market movements show that the period from 1997 to 2002 had higher correlations than in the past.

An advantage to investing in foreign markets is:

There are several reasons why some analysts think that financial markets have become more highly correlated in recent years. Which one does not belong?

Developed countries' stock market returns have correlations to the U.S. market that:

Which of the following are benefits of diversification into foreign securities?

Administrative problems, such as different settlement procedures for various markets, can best be avoided by:

Investing directly in the international equities markets refers to buying shares: