Question 1

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 A

Question 2

The OTC market

Accepted Answer

A) does not accept credit-the dealers "only take cash". 
B) is a dealer market. 
C) includes the NASDAQ in the U.S. 
D) both b and c 
A) does not accept credit-the dealers "only take cash". 
B) is a dealer market. 
C) includes the NASDAQ in the U.S. 
D) both b and c D

Question 3

Which of the following are true?

Accepted Answer

A) Unless you give your broker specific instructions to the contrary, orders to buy or sell a stock are day orders. 
B) Orders that have been placed but not executed during regular trading hours will automatically carry over into after-hours trading but not the next regular trading day. 
C) Similarly, day orders placed during after-hours trading will automatically carry over into the next regular trading day. 
D) If your order is not executed during a trading session, you are not allowed to place a new order in the next trading session. 
E) All of the above are true 
A) Unless you give your broker specific instructions to the contrary, orders to buy or sell a stock are day orders. 
B) Orders that have been placed but not executed during regular trading hours will automatically carry over into after-hours trading but not the next regular trading day. 
C) Similarly, day orders placed during after-hours trading will automatically carry over into the next regular trading day. 
D) If your order is not executed during a trading session, you are not allowed to place a new order in the next trading session. 
E) All of the above are true A

Question 4

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 5

The over-the-counter (OTC)market is a dealer market.Almost all OTC stocks trade on the National Association of Security Dealers Automated Quotation System (NASDAQ),which is a computer-linked system that shows

Accepted Answer

A) the limit orders of all available counterparties. 
B) the last price at which a security was sold. 
C) the bid (buy) and ask (sell) prices of all dealers in a security. 
D) the bid (sell) and ask (buy) prices of all dealers in a security. 
A) the limit orders of all available counterparties. 
B) the last price at which a security was sold. 
C) the bid (buy) and ask (sell) prices of all dealers in a security. 
D) the bid (sell) and ask (buy) prices of all dealers in a security.

Question 6

The first ADRs began trading ________ as a means of eliminating some of the risks,delays,inconveniences,and expenses of trading the actual shares.

Accepted Answer

A) in 1997 
B) in 1987 
C) in 1977 
D) in 1927 
A) in 1997 
B) in 1987 
C) in 1977 
D) in 1927

Question 7

Studies examining the influence of industrial structure on foreign equity returns

Accepted Answer

A) conclusively show a connection. 
B) have been inconclusive. 
C) show that industrialized economies outperform lesser developed economies. 
D) none of the above 
A) conclusively show a connection. 
B) have been inconclusive. 
C) show that industrialized economies outperform lesser developed economies. 
D) none of the above

Question 8

The secondary stock markets

Accepted Answer

A) are the markets for "pre-owned" or "used" shares of stock 
B) provide marketability to shares. 
C) provide price discovery or share valuation. 
D) all of the above 
A) are the markets for "pre-owned" or "used" shares of stock 
B) provide marketability to shares. 
C) provide price discovery or share valuation. 
D) all of the above

Question 9

Call markets and crowd trading offer advantages for __________ because they mitigate the possibility of sparse order flow over short time periods.

Accepted Answer

A) thinly traded issues 
B) actively traded issues 
C) stocks but not bonds 
D) None of the above 
A) thinly traded issues 
B) actively traded issues 
C) stocks but not bonds 
D) None of the above

Question 10

In an agency market,the broker takes the client's order through the agent,who matches it with another public order.Names for the agent are

Accepted Answer

A) official broker. 
B) central broker. 
C) a broker's broker. 
D) all of the above 
A) official broker. 
B) central broker. 
C) a broker's broker. 
D) all of the above

Question 11

Which factors fuel the sale of "Yankee" stock offerings?

Accepted Answer

A) Privatization by many Latin American and Eastern European government-owned companies. 
B) The rapid growth in the economies of the developing world. 
C) The expected large demand for new capital by Mexican companies now that NAFTA has been approved. 
D) All of the above 
A) Privatization by many Latin American and Eastern European government-owned companies. 
B) The rapid growth in the economies of the developing world. 
C) The expected large demand for new capital by Mexican companies now that NAFTA has been approved. 
D) All of the above

Question 12

Changes in exchange rates

Accepted Answer

A) explain a larger portion of the variability foreign bond indexes than foreign equity indexes. 
B) do not affect all foreign equity markets equally. 
C) do affect dollar-denominated foreign equity returns, but this risk can be hedged. 
D) all of the above 
A) explain a larger portion of the variability foreign bond indexes than foreign equity indexes. 
B) do not affect all foreign equity markets equally. 
C) do affect dollar-denominated foreign equity returns, but this risk can be hedged. 
D) all of the above

Question 13

Public traders do not trade directly with one another in a dealer market.

Accepted Answer

A) True 
 B)False

Question 14

The turnover ratio percentages for 36 equity markets of emerging markets for the five years beginning with 2002 were measured.Many of the small equity markets in each region (e.g.,Peru,Venezuela,Sri Lanka,Slovak Republic,Croatia,and Zimbabwe)have relatively low turnover ratios,

Accepted Answer

A) indicating poor liquidity at present. 
B) indicating good liquidity at present. 
C) indicating strong investment performance over the period. 
D) none of the above 
A) indicating poor liquidity at present. 
B) indicating good liquidity at present. 
C) indicating strong investment performance over the period. 
D) none of the above

Question 15

The turnover ratio percentages for 27 equity markets of developed countries for the five years beginning with 2002 were measured.Most national equity markets had very high turnover ratios,with the great majority in excess of

Accepted Answer

A) 15 percent turnover per year. 
B) 25 percent turnover per year. 
C) 50 percent turnover per year. 
D) 75 percent turnover per year. 
A) 15 percent turnover per year. 
B) 25 percent turnover per year. 
C) 50 percent turnover per year. 
D) 75 percent turnover per year.

Question 16

Calculate the dollar-based percentage return an American would have if he bought a German stock at €50 per share and sold it one year later at €60.The spot exchange rate one year ago was $1.50 = €1 and the spot rate prevailing at the end of the year was $1.70 = €1.

Accepted Answer

A) 36% gain 
B) 26.47% gain 
C) 4% loss 
D) 9.6% gain 
E) None of the above 
A) 36% gain 
B) 26.47% gain 
C) 4% loss 
D) 9.6% gain 
E) None of the above

Question 17

As a measure of "liquidity",

Accepted Answer

A) generally, the lower the turnover, the greater the liquidity of a secondary stock market. 
B) generally, the higher the turnover, the greater the liquidity of a secondary stock market. 
C) the more a financial asset gurgles when shook the greater the liquidity. 
D) none of the above 
A) generally, the lower the turnover, the greater the liquidity of a secondary stock market. 
B) generally, the higher the turnover, the greater the liquidity of a secondary stock market. 
C) the more a financial asset gurgles when shook the greater the liquidity. 
D) none of the above

Question 18

Which factors appear to be fueling the sale of Yankee stocks?

Accepted Answer

A) The push for privatization by many Latin American and Eastern European government-owned companies. 
B) The rapid growth in the economies of the developing countries. 
C) The large demand for new capital by Mexican companies following approval of the North American Free Trade Agreement. 
D) All of the above 
A) The push for privatization by many Latin American and Eastern European government-owned companies. 
B) The rapid growth in the economies of the developing countries. 
C) The large demand for new capital by Mexican companies following approval of the North American Free Trade Agreement. 
D) All of the above

Question 19

"Yankee" stock offerings are

Accepted Answer

A) shares in foreign companies originally sold to U.S.investors. 
B) dollar-denominated shares in foreign companies originally sold to U.S.investors. 
C) U.S.stocks held abroad. 
D) none of the above 
A) shares in foreign companies originally sold to U.S.investors. 
B) dollar-denominated shares in foreign companies originally sold to U.S.investors. 
C) U.S.stocks held abroad. 
D) none of the above

Question 20

A crowd of floor traders on the NYSE

Accepted Answer

A) may arrive at a more favorable price for their clients "inside" the specialist's bid and ask quotes. 
B) are obliged to execute their trades through a specialist. 
C) are allowed to "front run" their own trades ahead of customer trades. 
D) all of the above 
A) may arrive at a more favorable price for their clients "inside" the specialist's bid and ask quotes. 
B) are obliged to execute their trades through a specialist. 
C) are allowed to "front run" their own trades ahead of customer trades. 
D) all of the above

Exam 13: International Equity Markets

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

The OTC market

Which of the following are true?

ADRs

The over-the-counter (OTC)market is a dealer market.Almost all OTC stocks trade on the National Association of Security Dealers Automated Quotation System (NASDAQ),which is a computer-linked system that shows

The first ADRs began trading ________ as a means of eliminating some of the risks,delays,inconveniences,and expenses of trading the actual shares.

Studies examining the influence of industrial structure on foreign equity returns

The secondary stock markets

Call markets and crowd trading offer advantages for __________ because they mitigate the possibility of sparse order flow over short time periods.

In an agency market,the broker takes the client's order through the agent,who matches it with another public order.Names for the agent are

Which factors fuel the sale of "Yankee" stock offerings?

Changes in exchange rates

Public traders do not trade directly with one another in a dealer market.

The turnover ratio percentages for 36 equity markets of emerging markets for the five years beginning with 2002 were measured.Many of the small equity markets in each region (e.g.,Peru,Venezuela,Sri Lanka,Slovak Republic,Croatia,and Zimbabwe)have relatively low turnover ratios,

The turnover ratio percentages for 27 equity markets of developed countries for the five years beginning with 2002 were measured.Most national equity markets had very high turnover ratios,with the great majority in excess of

Calculate the dollar-based percentage return an American would have if he bought a German stock at €50 per share and sold it one year later at €60.The spot exchange rate one year ago was $1.50 = €1 and the spot rate prevailing at the end of the year was $1.70 = €1.

As a measure of "liquidity",

Which factors appear to be fueling the sale of Yankee stocks?

"Yankee" stock offerings are

A crowd of floor traders on the NYSE

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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