Question 1

A market order

Accepted Answer

A) is an instruction from a customer to a broker to buy or sell at the best price available when the order is received (immediately). 
B) is an instruction from a customer to a broker to buy or sell in a particular market (e.g.NYS
E) . 
C) is always and everywhere "fill or kill". 
D) is always and everywhere "good till cancelled". 
A) is an instruction from a customer to a broker to buy or sell at the best price available when the order is received (immediately). 
B) is an instruction from a customer to a broker to buy or sell in a particular market (e.g.NYS
E) . 
C) is always and everywhere "fill or kill". 
D) is always and everywhere "good till cancelled".

Question 2

iShares MSCI are

Accepted Answer

A) exchange traded funds that are subject to U.S.SEC and IRS diversification requirements. 
B) open-end mutual funds sold OTC. 
C) exchange traded funds that are NOT subject to U.S.SEC and IRS diversification requirements. 
D) none of the above 
A) exchange traded funds that are subject to U.S.SEC and IRS diversification requirements. 
B) open-end mutual funds sold OTC. 
C) exchange traded funds that are NOT subject to U.S.SEC and IRS diversification requirements. 
D) none of the above

Question 3

The sale of previously issued common stock traded between investors occurs in

Accepted Answer

A) the primary market. 
B) the secondary market. 
C) the on-the-run market. 
D) the dealer market. 
A) the primary market. 
B) the secondary market. 
C) the on-the-run market. 
D) the dealer market.

Question 4

A limit order

Accepted Answer

A) is an instruction from a customer to a broker to buy or sell in at a particular price (or better). 
B) can be a "day order"-that is the order is cancelled if not executed during that day's trading. 
C) can be "good till cancelled". 
D) all of the above 
A) is an instruction from a customer to a broker to buy or sell in at a particular price (or better). 
B) can be a "day order"-that is the order is cancelled if not executed during that day's trading. 
C) can be "good till cancelled". 
D) all of the above

Question 5

The European Stock Exchange,comparable in volume to the NYSE

Accepted Answer

A) is located in Milan. 
B) is located in London. 
C) is located in Frankfurt. 
D) none of the above 
A) is located in Milan. 
B) is located in London. 
C) is located in Frankfurt. 
D) none of the above

Question 6

Adler and Simon (1986)examined the exposure of a sample of foreign equity and bond index returns to exchange rate changes.They found that

Accepted Answer

A) changes in exchange rates generally explained a smaller portion of the variability of foreign bond indexes than foreign equity indexes. 
B) changes in exchange rates generally explained none of the variability of foreign bond indexes but completely explained the variability in foreign equity indexes. 
C) changes in exchange rates generally explained a larger portion of the variability of foreign equity indexes than foreign bond indexes. 
D) changes in exchange rates generally explained a larger portion of the variability of foreign bond indexes than foreign equity indexes. 
A) changes in exchange rates generally explained a smaller portion of the variability of foreign bond indexes than foreign equity indexes. 
B) changes in exchange rates generally explained none of the variability of foreign bond indexes but completely explained the variability in foreign equity indexes. 
C) changes in exchange rates generally explained a larger portion of the variability of foreign equity indexes than foreign bond indexes. 
D) changes in exchange rates generally explained a larger portion of the variability of foreign bond indexes than foreign equity indexes.

Question 7

Factors affecting international equity returns are

Accepted Answer

A) macroeconomic variables that influence the overall economy. 
B) exchange rate changes. 
C) the industrial structure of the country. 
D) all of the above 
A) macroeconomic variables that influence the overall economy. 
B) exchange rate changes. 
C) the industrial structure of the country. 
D) all of the above

Question 8

Transactions in shares of the iShares Funds will typically generate tax consequences.This is because

Accepted Answer

A) iShares Funds are obliged to distribute portfolio gains to shareholders. 
B) iShares Funds are not allowed to be held in tax-qualified accounts such as IRAs. 
C) iShares Funds feature daily resettlement. 
D) none of the above 
A) iShares Funds are obliged to distribute portfolio gains to shareholders. 
B) iShares Funds are not allowed to be held in tax-qualified accounts such as IRAs. 
C) iShares Funds feature daily resettlement. 
D) none of the above

Question 9

On the Paris bourse,shares of Avionelle trade at €45.The spot exchange rate is $1.40 = €1.00.What is the no-arbitrage U.S.dollar price of an Avionelle ADR? Assume that transactions costs are negligible.

Accepted Answer

A) $63 
B) $32.14 
C) $45 
D) $45.50 
A) $63 
B) $32.14 
C) $45 
D) $45.50

Question 10

Which type of trading system is desirable for actively traded issues?

Accepted Answer

A) Continuous trading systems 
B) Call trading systems 
C) Crowd trading systems 
D) None of the above 
A) Continuous trading systems 
B) Call trading systems 
C) Crowd trading systems 
D) None of the above

Question 11

The market capitalization of the developing world

Accepted Answer

A) is about 80 percent of the market capitalization of the entire world. 
B) is about 60 percent of the market capitalization of the entire world. 
C) is about 40 percent of the market capitalization of the entire world. 
D) is about 20 percent of the market capitalization of the entire world. 
A) is about 80 percent of the market capitalization of the entire world. 
B) is about 60 percent of the market capitalization of the entire world. 
C) is about 40 percent of the market capitalization of the entire world. 
D) is about 20 percent of the market capitalization of the entire world.

Question 12

Generally,the lower the turnover ratio,

Accepted Answer

A) the less liquid the secondary stock market, indicating difficulty in trading. 
B) the more liquid the secondary stock market, indicating difficulty in trading. 
C) the more liquid the primary stock market, indicating difficulty in trading. 
D) the more efficient the stock market is. 
A) the less liquid the secondary stock market, indicating difficulty in trading. 
B) the more liquid the secondary stock market, indicating difficulty in trading. 
C) the more liquid the primary stock market, indicating difficulty in trading. 
D) the more efficient the stock market is.

Question 13

ADRs

Accepted Answer

A) frequently represent a multiple of the underlying shares. 
B) can trade on the NYSE. 
C) can trade on the NASDAQ. 
D) all of the above 
A) frequently represent a multiple of the underlying shares. 
B) can trade on the NYSE. 
C) can trade on the NASDAQ. 
D) all of the above

Question 14

The market capitalization of the developed world

Accepted Answer

A) is about 90 percent of the market capitalization of the entire world. 
B) is about 80 percent of the market capitalization of the entire world. 
C) is about 70 percent of the market capitalization of the entire world. 
D) is about 60 percent of the market capitalization of the entire world. 
A) is about 90 percent of the market capitalization of the entire world. 
B) is about 80 percent of the market capitalization of the entire world. 
C) is about 70 percent of the market capitalization of the entire world. 
D) is about 60 percent of the market capitalization of the entire world.

Question 15

A type of noncontinuous exchange trading system is crowd trading.

Accepted Answer

A) Unlike a call market in which there is a common price for all trades, several bilateral trades may take place at different prices in crowd trading. 
B) Unlike a continuous market in which there is a common price for all trades, several bilateral trades may take place at different prices. 
C) Unlike a call market in which several bilateral trades may take place at different prices there is a common price for all trades in a call market. 
D) None of the above 
A) Unlike a call market in which there is a common price for all trades, several bilateral trades may take place at different prices in crowd trading. 
B) Unlike a continuous market in which there is a common price for all trades, several bilateral trades may take place at different prices. 
C) Unlike a call market in which several bilateral trades may take place at different prices there is a common price for all trades in a call market. 
D) None of the above

Question 16

The more concentrated a national stock market is

Accepted Answer

A) the greater opportunity a global investor has to include shares from that county in an internationally diversified portfolio. 
B) the less opportunity a global investor has to include shares from that county in an internationally diversified portfolio. 
C) the broader the investor base across a number of different shares and industries. 
D) none of the above 
A) the greater opportunity a global investor has to include shares from that county in an internationally diversified portfolio. 
B) the less opportunity a global investor has to include shares from that county in an internationally diversified portfolio. 
C) the broader the investor base across a number of different shares and industries. 
D) none of the above

Question 17

American Depository Receipt (ADRs)represent foreign stocks

Accepted Answer

A) denominated in U.S.dollars that trade on European stock exchanges. 
B) denominated in U.S.dollars that trade on a U.S.stock exchange. 
C) denominated in a foreign currency that trade on a U.S.stock exchange. 
D) non-registered (bearer) securities. 
A) denominated in U.S.dollars that trade on European stock exchanges. 
B) denominated in U.S.dollars that trade on a U.S.stock exchange. 
C) denominated in a foreign currency that trade on a U.S.stock exchange. 
D) non-registered (bearer) securities.

Question 18

Many of the small foreign equity markets (e.g.Chile,Sri Lanka)

Accepted Answer

A) have poor liquidity at present. 
B) are very liquid stock markets, since the poor people living there are eager to sell their securities. 
C) have fairly high turnover ratios indicating strong liquidity. 
D) none of the above 
A) have poor liquidity at present. 
B) are very liquid stock markets, since the poor people living there are eager to sell their securities. 
C) have fairly high turnover ratios indicating strong liquidity. 
D) none of the above

Question 19

Only in the _______ did world investors start to invest sizable amounts in the emerging equity markets,as the economic growth and prospects of the developing countries improved.

Accepted Answer

A) 1960s 
B) 1970s 
C) 1980s 
D) 1990s 
A) 1960s 
B) 1970s 
C) 1980s 
D) 1990s

Question 20

A stop order is an order to buy or sell a stock once the price of the stock reaches a specified price,known as

Accepted Answer

A) the stop price. 
B) the limit price. 
C) the last price. 
D) the sell price. 
A) the stop price. 
B) the limit price. 
C) the last price. 
D) the sell price.

Exam 13: International Equity Markets

A market order

iShares MSCI are

The sale of previously issued common stock traded between investors occurs in

A limit order

The European Stock Exchange,comparable in volume to the NYSE

Adler and Simon (1986)examined the exposure of a sample of foreign equity and bond index returns to exchange rate changes.They found that

Factors affecting international equity returns are

Transactions in shares of the iShares Funds will typically generate tax consequences.This is because

On the Paris bourse,shares of Avionelle trade at €45.The spot exchange rate is $1.40 = €1.00.What is the no-arbitrage U.S.dollar price of an Avionelle ADR? Assume that transactions costs are negligible.

Which type of trading system is desirable for actively traded issues?

The market capitalization of the developing world

Generally,the lower the turnover ratio,

ADRs

The market capitalization of the developed world

A type of noncontinuous exchange trading system is crowd trading.

The more concentrated a national stock market is

American Depository Receipt (ADRs)represent foreign stocks

Many of the small foreign equity markets (e.g.Chile,Sri Lanka)

Only in the _______ did world investors start to invest sizable amounts in the emerging equity markets,as the economic growth and prospects of the developing countries improved.

A stop order is an order to buy or sell a stock once the price of the stock reaches a specified price,known as

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

Interest Rate and Currency Swaps

International Portfolio Investment

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

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