Question 1

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 2

A _____ brings together those who want to invest money and those who want to borrow money.

Accepted Answer

A)  consumer market 
B)  value chain 
C)  supply chain 
D)  capital market 
A)  consumer market 
B)  value chain 
C)  supply chain 
D)  capital market

Question 3

_____ can inject risk into foreign currency borrowing.

Accepted Answer

A)  Movements in exchange rates 
B)  Use of fixed-exchange rates 
C)  Issue of domestic bonds 
D)  Use of pegged exchange rates 
A)  Movements in exchange rates 
B)  Use of fixed-exchange rates 
C)  Issue of domestic bonds 
D)  Use of pegged exchange rates

Question 4

A Eurocurrency is any currency _____.

Accepted Answer

A)  banked outside of its country of origin 
B)  that is traded in European countries 
C)  that originates in European countries 
D)  used to buy gold and related commodities 
A)  banked outside of its country of origin 
B)  that is traded in European countries 
C)  that originates in European countries 
D)  used to buy gold and related commodities

Question 5

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

Accepted Answer

In country after country,financial servi

Question 6

What is systematic risk?

Accepted Answer

Systematic risk refers to movements in a

Question 7

Eurodollars _____.

Accepted Answer

A)  refer to the exchange value of dollar with Euro 
B)  are used to pay for imports from Europe 
C)  are dollars banked outside of the United States 
D)  refer to the exchange buffer that Euro has against dollar 
A)  refer to the exchange value of dollar with Euro 
B)  are used to pay for imports from Europe 
C)  are dollars banked outside of the United States 
D)  refer to the exchange buffer that Euro has against dollar

Question 8

Analysts who believe globalization of capital has serious risks argue that _____.

Accepted Answer

A)  capital does not shift in and out of countries as quickly as conditions change 
B)  individual nations are becoming more vulnerable to speculative capital 
C)  deregulation of trade is helpful for the economic growth in a country 
D)  most of the capital that moves internationally is pursuing long term gains 
A)  capital does not shift in and out of countries as quickly as conditions change 
B)  individual nations are becoming more vulnerable to speculative capital 
C)  deregulation of trade is helpful for the economic growth in a country 
D)  most of the capital that moves internationally is pursuing long term gains

Question 9

Which of the following statements is true of foreign bonds?

Accepted Answer

A)  Such bonds must be underwritten by an international syndicate of banks. 
B)  Foreign bonds are placed only in the originating country. 
C)  Foreign bonds are issued by governments rather than corporations. 
D)  Such bonds are denominated in the issuing country's currency. 
A)  Such bonds must be underwritten by an international syndicate of banks. 
B)  Foreign bonds are placed only in the originating country. 
C)  Foreign bonds are issued by governments rather than corporations. 
D)  Such bonds are denominated in the issuing country's currency.

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

Using floating exchange rates will help countries reduce the risk of investing in foreign assets.

Accepted Answer

A) True 
 B)False

Question 12

Financial services is an information-intensive industry.

Accepted Answer

A) True 
 B)False

Question 13

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 14

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 15

Which of the following is a drawback of the Eurocurrency market?

Accepted Answer

A)  Increased governmental controls 
B)  High reserve ratio requirements 
C)  Low interest rates on deposits 
D)  Exposure to foreign exchange risk 
A)  Increased governmental controls 
B)  High reserve ratio requirements 
C)  Low interest rates on deposits 
D)  Exposure to foreign exchange risk

Question 16

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

Accepted Answer

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

Question 17

Global capital market often lack information about the fundamental quality of foreign investments.

Accepted Answer

A) True 
 B)False

Question 18

Foreign bonds sold in the United States are called bulldogs.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following statements is true of market makers?

Accepted Answer

A)  Commercial banks are not allowed function as market makers. 
B)  Market makers are large investors who drive an economy. 
C)  Market makers facilitate only equity based loans. 
D)  Market makers connect investors and borrowers in a capital market. 
A)  Commercial banks are not allowed function as market makers. 
B)  Market makers are large investors who drive an economy. 
C)  Market makers facilitate only equity based loans. 
D)  Market makers connect investors and borrowers in a capital market.

Question 20

Identify the risks associated with global capital markets.

Accepted Answer

According to some analysts,deregulation

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

A _____ brings together those who want to invest money and those who want to borrow money.

_____ can inject risk into foreign currency borrowing.

A Eurocurrency is any currency _____.

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

What is systematic risk?

Eurodollars _____.

Analysts who believe globalization of capital has serious risks argue that _____.

Which of the following statements is true of foreign bonds?

An equity loan is made when _____.

Using floating exchange rates will help countries reduce the risk of investing in foreign assets.

Financial services is an information-intensive industry.

Which of the following statements is true of debt loans?

Hedge funds _____.

Which of the following is a drawback of the Eurocurrency market?

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

Global capital market often lack information about the fundamental quality of foreign investments.

Foreign bonds sold in the United States are called bulldogs.

Which of the following statements is true of market makers?

Identify the risks associated with global capital markets.

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 is a disadvantage of global capital market?

A _____ brings together those who want to invest money and those who want to borrow money.

_____ can inject risk into foreign currency borrowing.

A Eurocurrency is any currency _____.

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

What is systematic risk?

Eurodollars _____.

Analysts who believe globalization of capital has serious risks argue that _____.

Which of the following statements is true of foreign bonds?

An equity loan is made when _____.

Using floating exchange rates will help countries reduce the risk of investing in foreign assets.

Financial services is an information-intensive industry.

Which of the following statements is true of debt loans?

Hedge funds _____.

Which of the following is a drawback of the Eurocurrency market?

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

Global capital market often lack information about the fundamental quality of foreign investments.

Foreign bonds sold in the United States are called bulldogs.

Which of the following statements is true of market makers?

Identify the risks associated with global capital markets.

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