Question 1

BRIC nations are:

Accepted Answer

A) emerging nations in Eastern Europe. 
B) Brazil,Russia,India,and China. 
C) emerging nations in Africa. 
D) Bulgaria,Romania,Czech Republic,and Italy. 
A) emerging nations in Eastern Europe. 
B) Brazil,Russia,India,and China. 
C) emerging nations in Africa. 
D) Bulgaria,Romania,Czech Republic,and Italy. B

Question 2

In inefficient markets,asset prices tend to be:

Accepted Answer

A) lower than normal,so investment opportunities are available. 
B) higher than normal,so investment opportunities are limited. 
C) abnormally high or low,thereby creating opportunities for profit. 
D) subject to the forces of supply and demand. 
A) lower than normal,so investment opportunities are available. 
B) higher than normal,so investment opportunities are limited. 
C) abnormally high or low,thereby creating opportunities for profit. 
D) subject to the forces of supply and demand. C

Question 3

Although mutual funds can diversify risks,studies show that mutual funds:

Accepted Answer

A) also offer returns in excess of recognized benchmarks. 
B) produce returns that vary widely from country to country. 
C) underperform compared to recognized benchmarks. 
D) have higher transaction costs than other investments. 
A) also offer returns in excess of recognized benchmarks. 
B) produce returns that vary widely from country to country. 
C) underperform compared to recognized benchmarks. 
D) have higher transaction costs than other investments. C

Question 4

The primary benefit of foreign debt instruments to investors is:

Accepted Answer

A) low risk. 
B) small initial investment requirements. 
C) high returns. 
D) quick turn-over. 
A) low risk. 
B) small initial investment requirements. 
C) high returns. 
D) quick turn-over.

Question 5

Why do the values of ADRs closely track the values of the underlying stock?

Accepted Answer

A) If there is a discrepancy between the value of ADRs and the values of the underlying stock,arbitragers will quickly cause the values to converge. 
B) The only way to value ADRs is in relation to the values of the underlying stock. 
C) ADRs have no value except in relation to the underlying stock. 
D) Investors will not allow discrepancies between the values of ADRs and the values of underlying stock. 
A) If there is a discrepancy between the value of ADRs and the values of the underlying stock,arbitragers will quickly cause the values to converge. 
B) The only way to value ADRs is in relation to the values of the underlying stock. 
C) ADRs have no value except in relation to the underlying stock. 
D) Investors will not allow discrepancies between the values of ADRs and the values of underlying stock.

Question 6

What does the ratio in the Sharpe Index indicate?

Accepted Answer

A) The risk per unit of return 
B) The amount at risk in any investment 
C) The amount of potential profit in an investment 
D) The return per unit of risk 
A) The risk per unit of return 
B) The amount at risk in any investment 
C) The amount of potential profit in an investment 
D) The return per unit of risk

Question 7

What is an earnings call?

Accepted Answer

A) An earnings call occurs when investors in a firm call upon the firm to report its currency income. 
B) An earnings call occurs when a brokerage firm requires its clients who have made investments on credit to pay the debt owed to the brokerage firm. 
C) An earnings call is a general communication from an investment firm to its clients advising them of the current earnings of the major firms covered by the investment firm. 
D) An earnings call is a communication from a firm to the investment community that answers questions about the financial affairs and status of the firm. 
A) An earnings call occurs when investors in a firm call upon the firm to report its currency income. 
B) An earnings call occurs when a brokerage firm requires its clients who have made investments on credit to pay the debt owed to the brokerage firm. 
C) An earnings call is a general communication from an investment firm to its clients advising them of the current earnings of the major firms covered by the investment firm. 
D) An earnings call is a communication from a firm to the investment community that answers questions about the financial affairs and status of the firm.

Question 8

Government bonds issued by Organization for Economic Co-operation and Development countries are generally denominated in:

Accepted Answer

A) euros. 
B) USD. 
C) a currency other than the currency of the country issuing the bonds. 
D) the currency of the country issuing the bonds. 
A) euros. 
B) USD. 
C) a currency other than the currency of the country issuing the bonds. 
D) the currency of the country issuing the bonds.

Question 9

One of the primary factors that discourages direct foreign equity investment is:

Accepted Answer

A) government regulation. 
B) currency risk. 
C) high transaction costs. 
D) political risk. 
A) government regulation. 
B) currency risk. 
C) high transaction costs. 
D) political risk.

Question 10

Foreign equity investments:

Accepted Answer

A) cannot be made directly by investors from other countries. 
B) carry considerable risks,but also offer high returns. 
C) can easily be made through any organized stock exchange. 
D) are discouraged because informational asymmetry makes such investments too risky. 
A) cannot be made directly by investors from other countries. 
B) carry considerable risks,but also offer high returns. 
C) can easily be made through any organized stock exchange. 
D) are discouraged because informational asymmetry makes such investments too risky.

Question 11

What is indicated if a mutual fund trades at a discount?

Accepted Answer

A) It means that the mutual fund is increasing in value. 
B) It means that the value of the mutual fund on the mutual fund market is less than the net value of the assets in the fund. 
C) It means that investors in the fund value their investments at more than the net value of the assets owned by the fund. 
D) It means that the assets in the mutual fund are increasing in value. 
A) It means that the mutual fund is increasing in value. 
B) It means that the value of the mutual fund on the mutual fund market is less than the net value of the assets in the fund. 
C) It means that investors in the fund value their investments at more than the net value of the assets owned by the fund. 
D) It means that the assets in the mutual fund are increasing in value.

Question 12

What firms are more likely to disseminate financial information about the firms to investors and potential investors?

Accepted Answer

A) Firms based in the European Community 
B) Firms in emerging markets 
C) U.S.-based firms 
D) Firms that rely heavily on investments from foreign investors 
A) Firms based in the European Community 
B) Firms in emerging markets 
C) U.S.-based firms 
D) Firms that rely heavily on investments from foreign investors

Question 13

What are depository receipts?

Accepted Answer

Often,national stock exchanges do not al

Question 14

The returns in markets in many emerging nations are skewed to the right,which means that:

Accepted Answer

A) the incidence of high returns is larger than normal. 
B) there is more risk in the market. 
C) there are larger swings in returns in the market. 
D) the balance between returns and risks is advantageous. 
A) the incidence of high returns is larger than normal. 
B) there is more risk in the market. 
C) there are larger swings in returns in the market. 
D) the balance between returns and risks is advantageous.

Question 15

Investments decisions involve:

Accepted Answer

A) finding the highest returns possible. 
B) balancing returns with risks. 
C) finding the lowest risks possible. 
D) balancing investment amount with investment return. 
A) finding the highest returns possible. 
B) balancing returns with risks. 
C) finding the lowest risks possible. 
D) balancing investment amount with investment return.

Question 16

The phenomenon that is evidenced by an underrepresentation of foreign investments in a portfolio is known as:

Accepted Answer

A) weighted-average investing. 
B) home bias. 
C) foreign bias. 
D) portfolio investing. 
A) weighted-average investing. 
B) home bias. 
C) foreign bias. 
D) portfolio investing.

Question 17

The favored investment in most developing nations is:

Accepted Answer

A) precious metals. 
B) real estate. 
C) equities. 
D) currency. 
A) precious metals. 
B) real estate. 
C) equities. 
D) currency.

Question 18

The fundamental risk in a foreign investment that reflects the risk that investors take that the value of the thing invested in will change is called:

Accepted Answer

A) economic risk. 
B) default risk. 
C) currency risk. 
D) asset risk. 
A) economic risk. 
B) default risk. 
C) currency risk. 
D) asset risk.

Question 19

Ultimately,what is the net effect of government control of foreign investors?

Accepted Answer

A) Increased foreign investment in the country because of reduced risk. 
B) Increased transaction costs for investors and a desire for higher returns to offset the increased transaction costs. 
C) Decreased foreign investment by investors who seek less regulation of their investments. 
D) Decreased returns for investors because regulation reduces cost of capital. 
A) Increased foreign investment in the country because of reduced risk. 
B) Increased transaction costs for investors and a desire for higher returns to offset the increased transaction costs. 
C) Decreased foreign investment by investors who seek less regulation of their investments. 
D) Decreased returns for investors because regulation reduces cost of capital.

Question 20

How does correlation of assets affect the risks involved in foreign investments?

Accepted Answer

Correlation of assets describes the degr

BRIC nations are:

In inefficient markets,asset prices tend to be:

Although mutual funds can diversify risks,studies show that mutual funds:

The primary benefit of foreign debt instruments to investors is:

Why do the values of ADRs closely track the values of the underlying stock?

What does the ratio in the Sharpe Index indicate?

What is an earnings call?

Government bonds issued by Organization for Economic Co-operation and Development countries are generally denominated in:

One of the primary factors that discourages direct foreign equity investment is:

Foreign equity investments:

What is indicated if a mutual fund trades at a discount?

What firms are more likely to disseminate financial information about the firms to investors and potential investors?

What are depository receipts?

The returns in markets in many emerging nations are skewed to the right,which means that:

Investments decisions involve:

The phenomenon that is evidenced by an underrepresentation of foreign investments in a portfolio is known as:

The favored investment in most developing nations is:

The fundamental risk in a foreign investment that reflects the risk that investors take that the value of the thing invested in will change is called:

Ultimately,what is the net effect of government control of foreign investors?

How does correlation of assets affect the risks involved in foreign investments?

Introduction

International Financial Markets: Structure and Innovation

Currency and Eurocurrency Derivatives

Currency Systems and Valuation

Currency Parity Conditions

Currency Risk Exposure Measurement

Currency Exposure Management

Capital Budgeting

Advanced Capital Budgeting

Long-Term Financing

Optimizing and Financing Working Capital

International Alliances and Acquisitions

International Trade

International Taxation and Accounting

Filters

Exam 15: International Portfolio Investments

BRIC nations are:

In inefficient markets,asset prices tend to be:

Although mutual funds can diversify risks,studies show that mutual funds:

The primary benefit of foreign debt instruments to investors is:

Why do the values of ADRs closely track the values of the underlying stock?

What does the ratio in the Sharpe Index indicate?

What is an earnings call?

Government bonds issued by Organization for Economic Co-operation and Development countries are generally denominated in:

One of the primary factors that discourages direct foreign equity investment is:

Foreign equity investments:

What is indicated if a mutual fund trades at a discount?

What firms are more likely to disseminate financial information about the firms to investors and potential investors?

What are depository receipts?

The returns in markets in many emerging nations are skewed to the right,which means that:

Investments decisions involve:

The phenomenon that is evidenced by an underrepresentation of foreign investments in a portfolio is known as:

The favored investment in most developing nations is:

The fundamental risk in a foreign investment that reflects the risk that investors take that the value of the thing invested in will change is called:

Ultimately,what is the net effect of government control of foreign investors?

How does correlation of assets affect the risks involved in foreign investments?

Introduction

International Financial Markets: Structure and Innovation

Currency and Eurocurrency Derivatives

Currency Systems and Valuation

Currency Parity Conditions

Currency Risk Exposure Measurement

Currency Exposure Management

Capital Budgeting

Advanced Capital Budgeting

Long-Term Financing

Optimizing and Financing Working Capital

International Alliances and Acquisitions

International Trade

International Taxation and Accounting

Filters