Question 1

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 2

Global Registered Shares

Accepted Answer

A) are created when a MNC issues shares globally. 
B) purchased on one exchange (say NYS
E)  is fully fungible with shares purchased on another exchange (e.g. Frankfurt Stock Exchange). 
C) can trade in multiple currencies. 
D) all of the above 
A) are created when a MNC issues shares globally. 
B) purchased on one exchange (say NYS
E)  is fully fungible with shares purchased on another exchange (e.g. Frankfurt Stock Exchange). 
C) can trade in multiple currencies. 
D) all of the above

Question 3

In which type of market can liquidity "dry up"?

Accepted Answer

A) A bull market 
B) A bear market 
C) A speculative bubble 
D) A financial panic 
A) A bull market 
B) A bear market 
C) A speculative bubble 
D) A financial panic

Question 4

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 5

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 6

"Call market" and "crowd trading" take place on

Accepted Answer

A) a non-continuous exchange trading system. 
B) a continuous trading exchange system. 
C) non-continuous markets and continuous markets, respectively. 
D) continuous markets and non-continuous markets, respectively. 
A) a non-continuous exchange trading system. 
B) a continuous trading exchange system. 
C) non-continuous markets and continuous markets, respectively. 
D) continuous markets and non-continuous markets, respectively.

Question 7

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 8

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 9

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 10

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 11

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 12

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

Accepted Answer

A) True 
 B)False

Question 13

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 14

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 15

A stop-limit order is an order to buy or sell a stock that combines the features of a stop order and a limit order. Once the stop price is touched in the market, the stop-limit order becomes a limit order to buy or to sell at the limit price. Which of the following are true?

Accepted Answer

A) The benefit of a stop-limit order is that the investor can control the price at which the trade will get executed. 
B) A stop-limit order may never get filled if the stock's price never reaches the specified limit price. This may happen especially in fast-moving markets where prices fluctuate wildly. 
C) The use of stop limit orders is much more frequent for stocks that trade on an exchange than in the over-counter (OT
C)  market. 
D) In addition, your broker-dealer may not allow you to place a stop limit order on some securities or accept a stop limit order for OTC stocks. 
E) All of the above are true 
A) The benefit of a stop-limit order is that the investor can control the price at which the trade will get executed. 
B) A stop-limit order may never get filled if the stock's price never reaches the specified limit price. This may happen especially in fast-moving markets where prices fluctuate wildly. 
C) The use of stop limit orders is much more frequent for stocks that trade on an exchange than in the over-counter (OT
C)  market. 
D) In addition, your broker-dealer may not allow you to place a stop limit order on some securities or accept a stop limit order for OTC stocks. 
E) All of the above are true

Question 16

Over the last few years, turnover ratios in many emerging markets remained low and market concentration ratios remained high, indicating

Accepted Answer

A) that investment opportunities in these markets have been improving. 
B) that investment opportunities in these markets have not been improving. 
C) that investment opportunities in these markets are about to improve. 
D) none of the above 
A) that investment opportunities in these markets have been improving. 
B) that investment opportunities in these markets have not been improving. 
C) that investment opportunities in these markets are about to improve. 
D) none of the above

Question 17

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 18

ADRs

Accepted Answer

A) are American Depository Receipts. 
B) denominated in U.S. dollars that trade on a U.S. stock exchange. 
C) are depository receipts for foreign stocks held by the U.S. depository's custodian. 
D) all of the above 
A) are American Depository Receipts. 
B) denominated in U.S. dollars that trade on a U.S. stock exchange. 
C) are depository receipts for foreign stocks held by the U.S. depository's custodian. 
D) all of the above

Question 19

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 20

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.

Exam 13: International Equity Markets

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

Global Registered Shares

In which type of market can liquidity "dry up"?

A firm may cross-list its share to

iShares MSCI are

"Call market" and "crowd trading" take place on

As a measure of "liquidity",

In general if an investment

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

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

Changes in exchange rates

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

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

A "specialist"

A stop-limit order is an order to buy or sell a stock that combines the features of a stop order and a limit order. Once the stop price is touched in the market, the stop-limit order becomes a limit order to buy or to sell at the limit price. Which of the following are true?

Over the last few years, turnover ratios in many emerging markets remained low and market concentration ratios remained high, indicating

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,

ADRs

Generally, the lower the turnover ratio,

The market capitalization of the developed world

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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