Question 1

In the graph below,X and Y represent

Accepted Answer

A) U.S.stocks and international stocks. 
B) international stocks and U.S.stocks. 
C) systematic risk and unsystematic risk. 
D) none of the above 
A) U.S.stocks and international stocks. 
B) international stocks and U.S.stocks. 
C) systematic risk and unsystematic risk. 
D) none of the above

Question 2

Suppose you are a euro-based investor who just sold Microsoft shares that you had bought six months ago.You had invested €10,000 to buy Microsoft shares for $120 per share; the exchange rate was $1.55 per euro.You sold the stock for $135 per share and converted the dollar proceeds into euro at the exchange rate of $1.50 per euro.Compute the rate of return on your investment in euro terms.

Accepted Answer

A) 12.50% 
B) 16.25% 
C) 28.00% 
D) -9.09% 
A) 12.50% 
B) 16.25% 
C) 28.00% 
D) -9.09%

Question 3

Studies show that international stock markets tend to move more closely together when the volatility is higher.This finding suggests that

Accepted Answer

A) investors should liquidate their portfolio holdings during turbulent periods. 
B) since investors need risk diversification most precisely when markets are turbulent, there may be less benefit to international diversification for investors who liquidate their portfolio holdings during turbulent periods. 
C) this kind of correlation is why international portfolio diversification is smart for today's investor. 
D) none of the above 
A) investors should liquidate their portfolio holdings during turbulent periods. 
B) since investors need risk diversification most precisely when markets are turbulent, there may be less benefit to international diversification for investors who liquidate their portfolio holdings during turbulent periods. 
C) this kind of correlation is why international portfolio diversification is smart for today's investor. 
D) none of the above

Question 4

Hedge fund advisors typically receive a management fee,often __________ of the fund asset value as compensation,plus performance fee that can be 20-25 percent of capital appreciation.

Accepted Answer

A) 1 to 2 percent 
B) 10 to 20 basis points 
C) 10 percent 
D) None of the above 
A) 1 to 2 percent 
B) 10 to 20 basis points 
C) 10 percent 
D) None of the above

Question 5

The majority of ADRS

Accepted Answer

A) are from such developed countries as Australia and Japan. 
B) are from developing nations. 
C) are from emerging markets. 
D) both b) and c) 
A) are from such developed countries as Australia and Japan. 
B) are from developing nations. 
C) are from emerging markets. 
D) both b) and c)

Question 6

Calculate the euro-based return an Italian investor would have realized by investing €10,000 into a £50 British stock.One year after investment,the stock pays a £1 dividend,and sells for £54 the exchange rate has changed from €1.25 per pound to €1.30 per pound.

Accepted Answer

The answer of Calculate the euro-based return an Italian investor...

Question 7

When a country is more remote,with an uncommon language

Accepted Answer

A) domestic investors tend to invest more in country's market and less abroad. 
B) foreign investors tend to invest less in country's market. 
C) domestic investors tend to invest more in country's market. 
D) both a) and b) 
A) domestic investors tend to invest more in country's market and less abroad. 
B) foreign investors tend to invest less in country's market. 
C) domestic investors tend to invest more in country's market. 
D) both a) and b)

Question 8

The stock market of country A has an expected return of 5%, and a standard deviation of expected return of 8%. The stock market of country B has an expected return of 15% and a standard deviation of expected return of 10%.
-Assume that the correlation of expected return between security A and B is 0.2.Calculate the standard deviation of expected return of a portfolio that has half of its money invested in A and half in B.

Accepted Answer

The answer of The stock market of country A has...

Question 9

The stock market of country A has an expected return of 5%, and a standard deviation of expected return of 8%. The stock market of country B has an expected return of 15% and a standard deviation of expected return of 10%.
-Calculate the expected return of a portfolio that is half invested in A and half in B.

Accepted Answer

The answer of The stock market of country A has...

Question 10

Hedge funds

Accepted Answer

A) do not register as an investment company and are not subject to reporting or disclosure requirements. 
B) have experienced phenomenal growth in recent years. 
C) tend to have relatively low correlations with various stock market benchmarks. 
D) all of the above 
A) do not register as an investment company and are not subject to reporting or disclosure requirements. 
B) have experienced phenomenal growth in recent years. 
C) tend to have relatively low correlations with various stock market benchmarks. 
D) all of the above

Question 11

With regard to the past performance of U.S.-based closed end country funds

Accepted Answer

A) most investors who can invest directly in foreign markets without incurring excessive costs are advised to do so. 
B) NAVs offer superior diversification opportunities compared to the CECFs. 
C) both a) and b) 
D) none of the above 
A) most investors who can invest directly in foreign markets without incurring excessive costs are advised to do so. 
B) NAVs offer superior diversification opportunities compared to the CECFs. 
C) both a) and b) 
D) none of the above

Question 12

You will get more diversification

Accepted Answer

A) across industries than across countries. 
B) across countries than across industries. 
C) across stocks and bonds than across countries. 
D) none of the above 
A) across industries than across countries. 
B) across countries than across industries. 
C) across stocks and bonds than across countries. 
D) none of the above

Question 13

For those investors who desire international equity exposure,WEBS

Accepted Answer

A) may well serve as a major alternative to such traditional tools as international mutual funds, ADRs and closed-end country funds. 
B) are probably overpriced relative to international mutual funds, ADRs and closed-end country funds. 
C) would provide no international equity exposure since they are pools of bonds. 
D) none of the above 
A) may well serve as a major alternative to such traditional tools as international mutual funds, ADRs and closed-end country funds. 
B) are probably overpriced relative to international mutual funds, ADRs and closed-end country funds. 
C) would provide no international equity exposure since they are pools of bonds. 
D) none of the above

Question 14

Emerald Energy is an oil exploration and production company that trades on the London stock market.Assume that when purchased by an international investor the stock's price and the exchange rate were £5 and £0.64/$1.00 respectively.At selling time,one year after purchase,they were £6 and £0.60/$1.00.If the investor had sold £5,the principal investment amount at the same time that the stock was purchased,forward at the forward exchange rate of £0.60/$1.00,the dollar rate of return would be:

Accepted Answer

A) 0.26% 
B) 26.00% 
C) 28.00% 
D) 30.00% 
A) 0.26% 
B) 26.00% 
C) 28.00% 
D) 30.00%

Question 15

Calculate the euro-based return an Italian investor would have realized by investing €10,000 into a $50 American stock.One year after investment,the stock pays a $1 dividend,and sells for $54 the exchange rate has changed from €.625 per dollar to €.6875 per dollar.

Accepted Answer

Our invest

Question 16

The "world beta" measures the

Accepted Answer

A) unsystematic risk. 
B) sensitivity of returns on a security to world market movements. 
C) risk-adjusted performance. 
D) risk of default and bankruptcy. 
A) unsystematic risk. 
B) sensitivity of returns on a security to world market movements. 
C) risk-adjusted performance. 
D) risk of default and bankruptcy.

Question 17

The record of investing in U.S.-based international mutual funds

Accepted Answer

A) shows that most funds have a beta much less than one. 
B) shows them to be a raging arbitrage opportunity. 
C) shows that they offer less diversification benefits than just investing in U.S.-based MNCs. 
D) none of the above 
A) shows that most funds have a beta much less than one. 
B) shows them to be a raging arbitrage opportunity. 
C) shows that they offer less diversification benefits than just investing in U.S.-based MNCs. 
D) none of the above

Question 18

Assume that you have invested $100,000 in British equities.When purchased the stock's price and the exchange rate were £50 and £0.50/$1.00 respectively.At selling time,one year after purchase,they were £45 and £0.60/$1.00.If the investor had sold £50,000 forward at the forward exchange rate of £0.55/$1.00,the dollar rate of return would be:

Accepted Answer

A) -27.27% 
B) -17.42% 
C) 28.00% 
D) -9.09% 
A) -27.27% 
B) -17.42% 
C) 28.00% 
D) -9.09%

Question 19

Calculate the euro-based return an Italian investor would have realized by investing €10,000 into a £50 British stock.One year after investment,the stock has no value since the firm is bankrupt.Meanwhile the exchange rate has changed from €1.25 per pound to €1.30 per pound,and he sold £8,000 forward at the forward rate of €1.28 per pound.

Accepted Answer

@#IMG-DLM& Our investor lost a

Question 20

Hedge fund advisors typically receive a "2-plus-twenty" management fee

Accepted Answer

A) meaning 2 percent per year of the assets under management, plus performance fee 20 percent of any capital appreciation. 
B) meaning 2 percent per year of the assets under management, plus performance fee 20 basis points. 
C) meaning 2 percent per year of the assets under management, plus performance fee of 20 percent of the excess return. 
D) meaning 2 percent per year of the assets under management, plus performance fee 20 percent of gross return net of the risk-free rate. 
A) meaning 2 percent per year of the assets under management, plus performance fee 20 percent of any capital appreciation. 
B) meaning 2 percent per year of the assets under management, plus performance fee 20 basis points. 
C) meaning 2 percent per year of the assets under management, plus performance fee of 20 percent of the excess return. 
D) meaning 2 percent per year of the assets under management, plus performance fee 20 percent of gross return net of the risk-free rate.

In the graph below,X and Y represent

Studies show that international stock markets tend to move more closely together when the volatility is higher.This finding suggests that

Hedge fund advisors typically receive a management fee,often __________ of the fund asset value as compensation,plus performance fee that can be 20-25 percent of capital appreciation.

The majority of ADRS

Calculate the euro-based return an Italian investor would have realized by investing €10,000 into a £50 British stock.One year after investment,the stock pays a £1 dividend,and sells for £54 the exchange rate has changed from €1.25 per pound to €1.30 per pound.

When a country is more remote,with an uncommon language

Hedge funds

With regard to the past performance of U.S.-based closed end country funds

You will get more diversification

For those investors who desire international equity exposure,WEBS

Calculate the euro-based return an Italian investor would have realized by investing €10,000 into a $50 American stock.One year after investment,the stock pays a $1 dividend,and sells for $54 the exchange rate has changed from €.625 per dollar to €.6875 per dollar.

The "world beta" measures the

The record of investing in U.S.-based international mutual funds

Hedge fund advisors typically receive a "2-plus-twenty" management fee

Globalization and the Multinational Firm

International Monetary System

Balance of Payments

Corporate Governance Around the World

The Market for Foreign Exchange

International Parity Relationships and Forecasting Foreign Exchange Rates

Futures and Options on Foreign Exchange

Management of Transaction Exposure

Management of Economic Exposure

Management of Translation Exposure

International Banking and Money Market

International Bond Market

International Equity Markets

Interest Rate and Currency Swaps

Foreign Direct Investment and Cross-Border Acquisitions

International Capital Structure and the Cost of Capital

International Capital Budgeting

Multinational Cash Management

International Trade Finance

International Tax Environment and Transfer Pricing

Filters

Exam 15: International Portfolio Investment

In the graph below,X and Y represent

Studies show that international stock markets tend to move more closely together when the volatility is higher.This finding suggests that

Hedge fund advisors typically receive a management fee,often __________ of the fund asset value as compensation,plus performance fee that can be 20-25 percent of capital appreciation.

The majority of ADRS

Calculate the euro-based return an Italian investor would have realized by investing €10,000 into a £50 British stock.One year after investment,the stock pays a £1 dividend,and sells for £54 the exchange rate has changed from €1.25 per pound to €1.30 per pound.

When a country is more remote,with an uncommon language

Hedge funds

With regard to the past performance of U.S.-based closed end country funds

You will get more diversification

For those investors who desire international equity exposure,WEBS

Calculate the euro-based return an Italian investor would have realized by investing €10,000 into a $50 American stock.One year after investment,the stock pays a $1 dividend,and sells for $54 the exchange rate has changed from €.625 per dollar to €.6875 per dollar.

The "world beta" measures the

The record of investing in U.S.-based international mutual funds

Hedge fund advisors typically receive a "2-plus-twenty" management fee

Globalization and the Multinational Firm

International Monetary System

Balance of Payments

Corporate Governance Around the World

The Market for Foreign Exchange

International Parity Relationships and Forecasting Foreign Exchange Rates

Futures and Options on Foreign Exchange

Management of Transaction Exposure

Management of Economic Exposure

Management of Translation Exposure

International Banking and Money Market

International Bond Market

International Equity Markets

Interest Rate and Currency Swaps

Foreign Direct Investment and Cross-Border Acquisitions

International Capital Structure and the Cost of Capital

International Capital Budgeting

Multinational Cash Management

International Trade Finance

International Tax Environment and Transfer Pricing

Filters