Question 1

The data show that several markets such as the United States and Britain continually outperform the other developed markets such as Canada,Switzerland,and Japan.

Accepted Answer

A) True 
 B)False

Question 2

The best possible way of achieving international diversification is to invest in United States companies having a large share of their business coming from foreign investment.

Accepted Answer

A) True 
 B)False

Question 3

The market capitalization of General Electric,Microsoft,and Exxon combined,would rank ahead of any emerging market's capitalization,including China.

Accepted Answer

A) True 
 B)False

Question 4

An "emerging market" is defined as a market where the country has a small capital market relative to the industrialized world.

Accepted Answer

A) True 
 B)False

Question 5

At the peak of the stock market bubble in 1999,the value of the developed world's stock market was $33 trillion.By 2002 the value had declined to less than $21 trillion.By year-end 2005 after several years of world-wide economic growth,the developed markets reached $36.5 trillion.

Accepted Answer

A) True 
 B)False

Question 6

Since the beginning of the 1990s,we have seen major growth in "emerging" markets such as Chile,Mexico,Poland,and the Czech Republic.

Accepted Answer

A) True 
 B)False

Question 7

Less developed countries may provide even greater risk reduction in a portfolio than developed countries.

Accepted Answer

A) True 
 B)False

Question 8

The second largest equity market in the world at the end of 2005 is that of

Accepted Answer

A)  Japan
B)  The United Kingdom
C)  The United States
D)  GermanyE) None of the above
F) C) and D)

Question 9

Administrative problems such as different settlement procedures for various markets can best be avoided by

Accepted Answer

A)  Becoming thoroughly comfortable with each country's procedures
B)  Using a local broker
C)  Investing in a mutual fund
D)  None of the aboveE) A) and C)
F) None of the above

Question 10

One possible way of achieving international diversification in a portfolio is to invest in foreign firms which trade on United States markets or through ADRs.

Accepted Answer

A) True 
 B)False

Question 11

Foreign exchange risk is not a major concern to international investors because there have been fewer wide swings in currency values in recent years.

Accepted Answer

A) True 
 B)False

Question 12

Direct international investment without the numerous associated administrative problems can be achieved by purchasing shares

Accepted Answer

A)  Of foreign firms which trade on the New York Stock Exchange or NASDAQ
B)  In a mutual fund
C)  In an exchange traded fund
D)  Of multinational corporationsE) A) and D)
F) A) and B)

Question 13

Risk exposure to foreign currency changes can be hedged through foreign exchange contracts or foreign currency options.

Accepted Answer

A) True 
 B)False

Question 14

An investor can earn a higher return in foreign markets than in the U.S.because

Accepted Answer

A)  A number of countries have superior real GDP growth rates compared to the U.S.
B)  Of foreign competitiveness in traditional U.S.products such as automobiles and steel
C)  Of the fact that many nations enjoy a higher savings rate than the United States,which leads to capital formation and potential investment opportunity
D)  All of the aboveE) A) and B)
F) None of the above

Question 15

Developed countries' stock market returns have correlations to the U.S.market that

Accepted Answer

A)  Are stable over the years
B)  Seem to maintain their relative rank order to each other compared to the U.S.
C)  Are consistently correlated to the U.S.markets at less than 1.00
D)  As a group has seen their correlation decline over the last 42 yearsE) B) and C)
F) None of the above

Question 16

Investing in an international mutual fund does not help the investor avoid the administrative problems one would encounter if investing directly in foreign securities.

Accepted Answer

A) True 
 B)False

Exam 19: International Securities Markets

Foreign exchange risk is not a major concern to international investors because there have been fewer wide swings in currency values in recent years.

Correct Answer
verified

Less developed countries may provide even greater risk reduction in a portfolio than developed countries.

Correct Answer
verified

Since the beginning of the 1990s,we have seen major growth in "emerging" markets such as Chile,Mexico,Poland,and the Czech Republic.

Correct Answer
verified

The second largest equity market in the world at the end of 2005 is that of

Correct Answer
verified

The best possible way of achieving international diversification is to invest in United States companies having a large share of their business coming from foreign investment.

Correct Answer
verified

One possible way of achieving international diversification in a portfolio is to invest in foreign firms which trade on United States markets or through ADRs.

Correct Answer
verified

An investor can earn a higher return in foreign markets than in the U.S.because

Correct Answer
verified

Developed countries' stock market returns have correlations to the U.S.market that

Correct Answer
verified

Risk exposure to foreign currency changes can be hedged through foreign exchange contracts or foreign currency options.

Correct Answer
verified

The market capitalization of General Electric,Microsoft,and Exxon combined,would rank ahead of any emerging market's capitalization,including China.

Correct Answer
verified

Direct international investment without the numerous associated administrative problems can be achieved by purchasing shares

Correct Answer
verified

Investing in an international mutual fund does not help the investor avoid the administrative problems one would encounter if investing directly in foreign securities.

Correct Answer
verified

Administrative problems such as different settlement procedures for various markets can best be avoided by

Correct Answer
verified

The data show that several markets such as the United States and Britain continually outperform the other developed markets such as Canada,Switzerland,and Japan.

Correct Answer
verified

An "emerging market" is defined as a market where the country has a small capital market relative to the industrialized world.

Correct Answer
verified

At the peak of the stock market bubble in 1999,the value of the developed world's stock market was $33 trillion.By 2002 the value had declined to less than $21 trillion.By year-end 2005 after several years of world-wide economic growth,the developed markets reached $36.5 trillion.

Correct Answer
verified

Exam 19: International Securities Markets

Foreign exchange risk is not a major concern to international investors because there have been fewer wide swings in currency values in recent years.

Correct AnswerverifiedShow Answer

Less developed countries may provide even greater risk reduction in a portfolio than developed countries.

Correct AnswerverifiedShow Answer

Since the beginning of the 1990s,we have seen major growth in "emerging" markets such as Chile,Mexico,Poland,and the Czech Republic.

Correct AnswerverifiedShow Answer

The second largest equity market in the world at the end of 2005 is that of

Correct AnswerverifiedShow Answer

The best possible way of achieving international diversification is to invest in United States companies having a large share of their business coming from foreign investment.

Correct AnswerverifiedShow Answer

One possible way of achieving international diversification in a portfolio is to invest in foreign firms which trade on United States markets or through ADRs.

Correct AnswerverifiedShow Answer

An investor can earn a higher return in foreign markets than in the U.S.because

Correct AnswerverifiedShow Answer

Developed countries' stock market returns have correlations to the U.S.market that

Correct AnswerverifiedShow Answer

Risk exposure to foreign currency changes can be hedged through foreign exchange contracts or foreign currency options.

Correct AnswerverifiedShow Answer

The market capitalization of General Electric,Microsoft,and Exxon combined,would rank ahead of any emerging market's capitalization,including China.

Correct AnswerverifiedShow Answer

Direct international investment without the numerous associated administrative problems can be achieved by purchasing shares

Correct AnswerverifiedShow Answer

Investing in an international mutual fund does not help the investor avoid the administrative problems one would encounter if investing directly in foreign securities.

Correct AnswerverifiedShow Answer

Administrative problems such as different settlement procedures for various markets can best be avoided by

Correct AnswerverifiedShow Answer

The data show that several markets such as the United States and Britain continually outperform the other developed markets such as Canada,Switzerland,and Japan.

Correct AnswerverifiedShow Answer

An "emerging market" is defined as a market where the country has a small capital market relative to the industrialized world.

Correct AnswerverifiedShow Answer

At the peak of the stock market bubble in 1999,the value of the developed world's stock market was $33 trillion.By 2002 the value had declined to less than $21 trillion.By year-end 2005 after several years of world-wide economic growth,the developed markets reached $36.5 trillion.

Correct AnswerverifiedShow Answer

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