Exam 19: Globalization and International Investing

Suppose that U.S.equity markets represent about 35% of total global equity markets and that the typical U.S.investor has about 95% of their portfolio invested only in U.S.equities.This is an example of _________.

Which one of the following country risks refers to the possibility of expropriation of assets,changes in tax policy and the possibility of restrictions on foreign exchange transactions?

All exchange rates are expressed as units of foreign currency that can be purchased with one U.S. dollar. Answer the following questions about decomposing the manager's performance. -What is the difference in return of the manager's portfolio due to country selection?

Annual inflation rate is a(n)_______ risk variable.

The major participants who directly purchase securities in the capital markets of other countries are predominantly ____________.

One year U.S.interest rates are 7% and European interest rates are 5%.The spot euro direct exchange rate quote is 1.30 and the one year forward rate direct quote is 1.25.If you have $1 million dollars or € 1 million to start with what would be your dollar profits from an interest arbitrage based on this data?

Suppose a U.S. investor wishes to invest in a British firm currently selling for ₤50 per share. The investor has $7,000 to invest and the current exchange rate is $1.40/₤. -After one year,the exchange rate is unchanged and the share price is ₤55.What is the pound-denominated return?

The correlation coefficient between the U.S.stock market index and stock market indices of major countries is __________.

Of the following,which is the most commonly used international index?

You find that the exchange rate quote for the yen is 121 yen per dollar.This is an example of a/an ________ quote.You also find that the euro is worth $1.33.This second quote is an example of a/an _______ quote.