Question 1

The advantages of a market order include the fact that

Accepted Answer

A) you are pretty much guaranteed that your order will be executed (assuming that there are willing buyers and sellers). 
B) a market order typically has lower commissions than a limit order. 
C) market orders increase your liquidity. 
D) both a and b 
A) you are pretty much guaranteed that your order will be executed (assuming that there are willing buyers and sellers). 
B) a market order typically has lower commissions than a limit order. 
C) market orders increase your liquidity. 
D) both a and b

Question 2

ADR trades

Accepted Answer

A) clear in three days, just like trades in U.S.shares. 
B) settle only after the trade in the underlying stocks clear, which can take time depending on the clearing practices of the national market. 
C) are price in the currency of the underlying security. 
D) all of the above 
A) clear in three days, just like trades in U.S.shares. 
B) settle only after the trade in the underlying stocks clear, which can take time depending on the clearing practices of the national market. 
C) are price in the currency of the underlying security. 
D) all of the above

Question 3

A measure of "liquidity" for a stock market is

Accepted Answer

A) the times interest earned ratio. 
B) the ratio of stock market transactions over a period of time divided by the size, or market capitalization, of the stock market. 
C) the LIBOR rate. 
D) both a and b 
A) the times interest earned ratio. 
B) the ratio of stock market transactions over a period of time divided by the size, or market capitalization, of the stock market. 
C) the LIBOR rate. 
D) both a and b

Question 4

The Toronto Stock exchange

Accepted Answer

A) is fully automated. 
B) features electronic matching of public orders. 
C) has continuous order flow. 
D) all of the above 
A) is fully automated. 
B) features electronic matching of public orders. 
C) has continuous order flow. 
D) all of the above

Question 5

In the Frankfurt market,Aldi stock closed at €5 per share.On the same day,the euro U.S.dollar spot exchange rate was €.625/$1.00.Aldi trades as an ADR in the OTC market in the United States.Five underlying Aldi shares are packaged into one ADR.The no-arbitrage U.S.price of one ADR is

Accepted Answer

A) €25.00 
B) $15.625 
C) $40 
D) None of the above 
A) €25.00 
B) $15.625 
C) $40 
D) None of the above

Question 6

In the London market,Rolls-Royce stock closed at £0.875 per share.On the same day,the British Pound sterling to the U.S.dollar spot exchange rate was £0.6366/$1.00.Rolls Royce trades as an ADR in the OTC market in the United States.Five underlying Rolls-Royce shares are packaged into one ADR.If the Rolls Royce ADRs were trading at $5.75 when the underlying shares were trading in London at £0.875,ignoring transaction costs,the arbitrage trading profit would be:

Accepted Answer

A) $0.00 
B) $1.12 
C) $2.12 
D) $3.12 
A) $0.00 
B) $1.12 
C) $2.12 
D) $3.12

Question 7

The large exchange markets in the United States are

Accepted Answer

A) agency markets. 
B) call markets. 
C) auction markets. 
D) agency/auction markets. 
A) agency markets. 
B) call markets. 
C) auction markets. 
D) agency/auction markets.

Question 8

A measure of liquidity for a stock market is the turnover ratio; defined as

Accepted Answer

A) the ratio of stock market transactions over a period of time divided by the size, or market capitalization, of the stock market. 
B) the ratio of the size, or market capitalization, of the stock market divided by the value of the stock market transactions over a period of time. 
C) the ratio of aggregate company sales over a period of time divided by the size, or market capitalization, of the stock market. 
D) none of the above 
A) the ratio of stock market transactions over a period of time divided by the size, or market capitalization, of the stock market. 
B) the ratio of the size, or market capitalization, of the stock market divided by the value of the stock market transactions over a period of time. 
C) the ratio of aggregate company sales over a period of time divided by the size, or market capitalization, of the stock market. 
D) none of the above

Question 9

A "call market"

Accepted Answer

A) is OTC and over-the-phone. 
B) features an agent of the exchange that accumulates a batch of orders that are periodically executed by written or verbal auction throughout the day. 
C) provides traders with execution at certain prices. 
D) both b and c 
A) is OTC and over-the-phone. 
B) features an agent of the exchange that accumulates a batch of orders that are periodically executed by written or verbal auction throughout the day. 
C) provides traders with execution at certain prices. 
D) both b and c

Question 10

Macroeconomic factors affecting international equity returns include

Accepted Answer

A) exchange rate changes. 
B) interest rate differentials. 
C) changes in inflationary expectations. 
D) all of the above 
A) exchange rate changes. 
B) interest rate differentials. 
C) changes in inflationary expectations. 
D) all of the above

Question 11

A "specialist"

Accepted Answer

A) makes a market by holding an inventory of a particular security, like IBM or Intel. 
B) is a participant on the floor of the exchange, like the NYSE. 
C) has a designated station on the floor of the exchange. 
D) all of the above 
A) makes a market by holding an inventory of a particular security, like IBM or Intel. 
B) is a participant on the floor of the exchange, like the NYSE. 
C) has a designated station on the floor of the exchange. 
D) all of the above

Question 12

A stop order is an order to buy or sell a stock once the price of the stock reaches a specified price,known as the stop price.When the specified price is reached,your stop order becomes a market order,The advantage of a stop order is

Accepted Answer

A) you don't have to monitor how a stock is performing on a daily basis. 
B) the stop price can be activated by a short-term fluctuation in a stock's price. 
C) once your stop price is reached, your stop order becomes a market order and the price you receive may be much different from the stop price, especially in a fast-moving market where stock prices can change rapidly. 
D) all of the above are advantages 
A) you don't have to monitor how a stock is performing on a daily basis. 
B) the stop price can be activated by a short-term fluctuation in a stock's price. 
C) once your stop price is reached, your stop order becomes a market order and the price you receive may be much different from the stop price, especially in a fast-moving market where stock prices can change rapidly. 
D) all of the above are advantages

Question 13

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 14

In general if an investment

Accepted Answer

A) has poor liquidity it should offer investors a liquidity premium. 
B) can be sold fairly quickly at a fair price, it has good liquidity. 
C) both a and b 
D) none of the above 
A) has poor liquidity it should offer investors a liquidity premium. 
B) can be sold fairly quickly at a fair price, it has good liquidity. 
C) both a and b 
D) none of the above

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

In the London market,Rolls-Royce stock closed at £0.875 per share.On the same day,the British Pound sterling to the U.S.dollar spot exchange rate was £0.6366/$1.00.Rolls Royce trades as an ADR in the OTC market in the United States.Five underlying Rolls-Royce shares are packaged into one ADR.The no-arbitrage U.S.price of one ADR is

Accepted Answer

A) $4.87 
B) $5.87 
C) $6.87 
D) $7.87 
A) $4.87 
B) $5.87 
C) $6.87 
D) $7.87

Question 17

On the NYSE,limit order prices receive preference in establishing the posted bid and ask prices if they are more favorable than the specialist's.Therefore

Accepted Answer

A) a specialist must fill a limit order, if possible, from his own account before trading the flow of public orders. 
B) specialists must fill a limit order, if possible, from the flow of public orders before trading for his own account. 
C) a specialist must change his posted bid and ask prices to reflect the available limit orders. 
A) a specialist must fill a limit order, if possible, from his own account before trading the flow of public orders. 
B) specialists must fill a limit order, if possible, from the flow of public orders before trading for his own account. 
C) a specialist must change his posted bid and ask prices to reflect the available limit orders.

Question 18

A firm may cross-list its share to

Accepted Answer

A) establish a broader investor base for its stock. 
B) establish name recognition in foreign capital markets, thus paving the way for the firm to source new equity and debt capital from investors in different markets. 
C) expose the firm's name to a broader investor and consumer groups. 
D) all of the above 
A) establish a broader investor base for its stock. 
B) establish name recognition in foreign capital markets, thus paving the way for the firm to source new equity and debt capital from investors in different markets. 
C) expose the firm's name to a broader investor and consumer groups. 
D) all of the above

Question 19

A liquid stock market

Accepted Answer

A) is one in which prices reflect all relevant information quickly. 
B) is one in which prices reflect all publicly available information quickly. 
C) is one in which prices reflect price and volume information quickly. 
D) is one in which investors can buy and sell stocks quickly at close to the current quoted prices. 
A) is one in which prices reflect all relevant information quickly. 
B) is one in which prices reflect all publicly available information quickly. 
C) is one in which prices reflect price and volume information quickly. 
D) is one in which investors can buy and sell stocks quickly at close to the current quoted prices.

Question 20

The smaller the concentration percentage,

Accepted Answer

A) the more concentrated a market is in a few stock issues. 
B) the less concentrated a market is. 
C) the more liquid the secondary stock market is. 
D) none of the above 
A) the more concentrated a market is in a few stock issues. 
B) the less concentrated a market is. 
C) the more liquid the secondary stock market is. 
D) none of the above

The advantages of a market order include the fact that

ADR trades

A measure of "liquidity" for a stock market is

The Toronto Stock exchange

In the Frankfurt market,Aldi stock closed at €5 per share.On the same day,the euro U.S.dollar spot exchange rate was €.625/$1.00.Aldi trades as an ADR in the OTC market in the United States.Five underlying Aldi shares are packaged into one ADR.The no-arbitrage U.S.price of one ADR is

The large exchange markets in the United States are

A measure of liquidity for a stock market is the turnover ratio; defined as

A "call market"

Macroeconomic factors affecting international equity returns include

A "specialist"

A stop order is an order to buy or sell a stock once the price of the stock reaches a specified price,known as the stop price.When the specified price is reached,your stop order becomes a market order,The advantage of a stop order is

The more concentrated a national stock market is

In general if an investment

A type of noncontinuous exchange trading system is crowd trading.

On the NYSE,limit order prices receive preference in establishing the posted bid and ask prices if they are more favorable than the specialist's.Therefore

A firm may cross-list its share to

A liquid stock market

The smaller the concentration percentage,

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

Filters

Exam 13: International Equity Markets

The advantages of a market order include the fact that

ADR trades

A measure of "liquidity" for a stock market is

The Toronto Stock exchange

In the Frankfurt market,Aldi stock closed at €5 per share.On the same day,the euro U.S.dollar spot exchange rate was €.625/$1.00.Aldi trades as an ADR in the OTC market in the United States.Five underlying Aldi shares are packaged into one ADR.The no-arbitrage U.S.price of one ADR is

The large exchange markets in the United States are

A measure of liquidity for a stock market is the turnover ratio; defined as

A "call market"

Macroeconomic factors affecting international equity returns include

A "specialist"

A stop order is an order to buy or sell a stock once the price of the stock reaches a specified price,known as the stop price.When the specified price is reached,your stop order becomes a market order,The advantage of a stop order is

The more concentrated a national stock market is

In general if an investment

A type of noncontinuous exchange trading system is crowd trading.

On the NYSE,limit order prices receive preference in establishing the posted bid and ask prices if they are more favorable than the specialist's.Therefore

A firm may cross-list its share to

A liquid stock market

The smaller the concentration percentage,

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

Filters