Question 1

All of the following are true about an American Depository Receipt EXCEPT:

Accepted Answer

A)  the depositary bank converts all dividends and other payments into U.S. dollars. 
B)  there are no custodial fees. 
C)  shares are held in custody by a U.S. depository bank. 
D)  it represents a specific number of shares in the home market. 
A)  the depositary bank converts all dividends and other payments into U.S. dollars. 
B)  there are no custodial fees. 
C)  shares are held in custody by a U.S. depository bank. 
D)  it represents a specific number of shares in the home market. B

Question 2

Which of the following concepts refers to the process of converting exchanges from nonprofit,member-owned organizations to for-profit investor-owned and typically publicly traded companies?

Accepted Answer

A)  demutualization 
B)  cross-listing 
C)  consolidation 
D)  alternative trading system 
A)  demutualization 
B)  cross-listing 
C)  consolidation 
D)  alternative trading system A

Question 3

What is the name of the effect related to market liquidity that occurs when a market lacks liquidity and an investor's trade is relatively large and results in an adverse effect on the price the investor gets?

Accepted Answer

A)  turnover 
B)  blocked funds 
C)  demutualization 
D)  market impact 
A)  turnover 
B)  blocked funds 
C)  demutualization 
D)  market impact D

Question 4

What is a price-driven trading system?

Accepted Answer

A trading system may be order driven or

Question 5

________,unlike ADRs,can trade across many markets and settle in the currency of each market.

Accepted Answer

A)  Global registered shares 
B)  Global depository receipts 
C)  Euro equities 
D)  Cross-listed stock 
A)  Global registered shares 
B)  Global depository receipts 
C)  Euro equities 
D)  Cross-listed stock

Question 6

________ trading systems,often found in foreign exchange markets,are good examples of markets in which market makers stand prepared to buy at their bid prices and sell at the ask or offer prices.

Accepted Answer

A)  Order-driven 
B)  Price-driven 
C)  Cross-listed 
D)  Cross-holding 
A)  Order-driven 
B)  Price-driven 
C)  Cross-listed 
D)  Cross-holding

Question 7

With respect to stock market organization,what do the countries of Belgium,France,Spain,Italy and Greece have in common?

Accepted Answer

A)  private bourse 
B)  public bourse 
C)  price-driven trading systems 
D)  order-driven trading systems 
A)  private bourse 
B)  public bourse 
C)  price-driven trading systems 
D)  order-driven trading systems

Question 8

When a firm issues shares in multiple foreign markets,sometimes simultaneously with distribution in the domestic market,the issue is part of the

Accepted Answer

A)  external equity market. 
B)  Euro-equity market. 
C)  depositary receipt market. 
D)  emerging market. 
A)  external equity market. 
B)  Euro-equity market. 
C)  depositary receipt market. 
D)  emerging market.

Question 9

________ is the total volume of trade done on an exchange measured in dollars during the year divided by the exchange's total market capitalization at the end of the year.

Accepted Answer

A)  The bid-ask spread 
B)  Turnover 
C)  Liquidity 
D)  The credit spread 
A)  The bid-ask spread 
B)  Turnover 
C)  Liquidity 
D)  The credit spread

Question 10

Which one of the following is NOT a trading cost?

Accepted Answer

A)  payment of brokerage commissions and other fees 
B)  The investor must buy from the trader at the trader's high sell price and must sell to the trader at the trader's low bid price. 
C)  When the market is not very liquid, and an investor's trade is a relatively large one, it can adversely affect the price the investor gets. 
D)  The price on the trade falls when the investor buys or rises when the investor sells. 
A)  payment of brokerage commissions and other fees 
B)  The investor must buy from the trader at the trader's high sell price and must sell to the trader at the trader's low bid price. 
C)  When the market is not very liquid, and an investor's trade is a relatively large one, it can adversely affect the price the investor gets. 
D)  The price on the trade falls when the investor buys or rises when the investor sells.

Question 11

How have global stock markets adjusted to competitive pressure from global investors?

Accepted Answer

Stock markets globally have increased cr

Question 12

What are the costs of cross-listing?

Accepted Answer

A)  It exploits growth opportunities with additional foreign capital. 
B)  It reduces the cost of capital. 
C)  It increases the stock price. 
D)  It costs money paid in exchange fees and it may impose a high level of examination on the company's managers. 
A)  It exploits growth opportunities with additional foreign capital. 
B)  It reduces the cost of capital. 
C)  It increases the stock price. 
D)  It costs money paid in exchange fees and it may impose a high level of examination on the company's managers.

Question 13

Which one of the following is one important characteristic of a private bourse?

Accepted Answer

A)  Brokers are appointed by the government. 
B)  A single corporation acquires a monopoly over all stock market transactions. 
C)  It is owned and operated by a corporation founded for the purpose of trading securities. 
D)  Private exchanges, in many countries, do not usually compete with one another. 
A)  Brokers are appointed by the government. 
B)  A single corporation acquires a monopoly over all stock market transactions. 
C)  It is owned and operated by a corporation founded for the purpose of trading securities. 
D)  Private exchanges, in many countries, do not usually compete with one another.

Question 14

When one corporation owns shares in another,the practice is known as ________.

Accepted Answer

A)  cross-listing 
B)  cross-market 
C)  cross-holding 
D)  diversification 
A)  cross-listing 
B)  cross-market 
C)  cross-holding 
D)  diversification

Question 15

Cross-listing of stocks and demutualization have led to the ________ of stock exchanges.

Accepted Answer

A)  externalization 
B)  securitization 
C)  globalization 
D)  order-driven trading systems 
A)  externalization 
B)  securitization 
C)  globalization 
D)  order-driven trading systems

Question 16

The stock markets of developing countries are often referred to as ________,and the young stock markets of the least developed countries are called ________.

Accepted Answer

A)  external equity markets, frontier markets 
B)  emerging markets, frontier markets 
C)  external equity markets, emerging markets 
D)  emerging markets, undeveloped markets 
A)  external equity markets, frontier markets 
B)  emerging markets, frontier markets 
C)  external equity markets, emerging markets 
D)  emerging markets, undeveloped markets

Question 17

Turnover is inversely related to the costs of trading stocks because

Accepted Answer

A)  high trading costs cause investors to trade more. 
B)  low trading costs cause investors not to trade. 
C)  high trading costs cause investors to trade less. 
D)  low trading costs cause investors not to trade more. 
A)  high trading costs cause investors to trade more. 
B)  low trading costs cause investors not to trade. 
C)  high trading costs cause investors to trade less. 
D)  low trading costs cause investors not to trade more.

Question 18

How are ADRs differentiated?

Accepted Answer

A major distinction among the three type

Question 19

What is distinguishes a public from a banker's bourse?

Accepted Answer

In a public bourse the government appoin

Question 20

The stock markets of the least developed countries are called ________ markets.

Accepted Answer

A)  emerging 
B)  start-up 
C)  frontier 
D)  secondary 
A)  emerging 
B)  start-up 
C)  frontier 
D)  secondary

Exam 12: International Equity Financing

All of the following are true about an American Depository Receipt EXCEPT:

Which of the following concepts refers to the process of converting exchanges from nonprofit,member-owned organizations to for-profit investor-owned and typically publicly traded companies?

What is the name of the effect related to market liquidity that occurs when a market lacks liquidity and an investor's trade is relatively large and results in an adverse effect on the price the investor gets?

What is a price-driven trading system?

________,unlike ADRs,can trade across many markets and settle in the currency of each market.

________ trading systems,often found in foreign exchange markets,are good examples of markets in which market makers stand prepared to buy at their bid prices and sell at the ask or offer prices.

With respect to stock market organization,what do the countries of Belgium,France,Spain,Italy and Greece have in common?

When a firm issues shares in multiple foreign markets,sometimes simultaneously with distribution in the domestic market,the issue is part of the

________ is the total volume of trade done on an exchange measured in dollars during the year divided by the exchange's total market capitalization at the end of the year.

Which one of the following is NOT a trading cost?

How have global stock markets adjusted to competitive pressure from global investors?

What are the costs of cross-listing?

Which one of the following is one important characteristic of a private bourse?

When one corporation owns shares in another,the practice is known as ________.

Cross-listing of stocks and demutualization have led to the ________ of stock exchanges.

The stock markets of developing countries are often referred to as ________,and the young stock markets of the least developed countries are called ________.

Turnover is inversely related to the costs of trading stocks because

How are ADRs differentiated?

What is distinguishes a public from a banker's bourse?

The stock markets of the least developed countries are called ________ markets.

Globalization and the Multinational Corporation

The Foreign Exchange Market

Forward Markets and Transaction Exchange Risk

The Balance of Payments

Exchange Rate Systems

Interest Rate Parity

Speculation and Risk in the Foreign Exchange Market

Purchasing Power Parity and Real Exchange Rates

Measuring and Managing Real Exchange Risk

Exchange Rate Determination and Forecasting

International Debt Financing

International Capital Market Equilibrium

Country and Political Risk

International Capital Budgeting

Additional Topics in International Capital Budgeting

Risk Management and the Foreign Currency Hedging Decision

Financing International Trade

Managing Net Working Capital

Foreign Currency Futures and Options

Interest Rates and Foreign Currency Swaps

Filters

The stock markets of developing countries are often referred to as ,and the young stock markets of the least developed countries are called .