Question 1

Economic risk is made up of country and political risks.

Accepted Answer

A) True 
 B)False

Question 2

A single ADR may represent more than one share of a foreign company.

Accepted Answer

A) True 
 B)False

Question 3

A sponsored ADR is issued with the blessing of

Accepted Answer

A)   a foreign government.
B)   the U.S. government.
C)   the underlying company.
D)   the World Bank.E) A) and B)
F) B) and C)

Question 4

Which of the following statements regarding international investments is most correct?

Accepted Answer

A)   Correlations between U.S. and foreign markets are high.
B)   Correlations between U.S. and foreign markets rise during bull markets.
C)   Correlations between U.S. and foreign markets rise during bear markets.
D)   Correlations between U.S. and foreign markets are usually near zero.E) All of the above
F) C) and D)

Question 5

Rates of return to U.S. investors in emerging markets should be higher than returns in the U.S.

Accepted Answer

A) True 
 B)False

Question 6

Low per capita GNP is a common theme of countries where emerging market exist.

Accepted Answer

A) True 
 B)False  True

Question 7

The percentage of World Bank loans on which the borrowed has defaulted is about

Accepted Answer

A)   zero.
B)   5%.
C)   15%.
D)   90%.E) A) and D)
F) None of the above

Question 8

There is little or no risk exposure to U.S. investors when they invest in foreign central bank notes.

Accepted Answer

A) True 
 B)False

Question 9

Emerging markets stocks tend to attract income investors.

Accepted Answer

A) True 
 B)False

Question 10

Trading costs in international markets are likely to be

Accepted Answer

A)   higher than in the U.S.
B)   lower than in the U.S.
C)   comparable to those in the U.S.
D)   much more volatile than those in the U.S.E) B) and D)
F) A) and C) A

Question 11

The two most popular emerging market exposure among pension funds are Asia and Latin America.

Accepted Answer

A) True 
 B)False

Question 12

Today, most institutional funds have at least 5% of their assets in foreign securities.

Accepted Answer

A) True 
 B)False

Question 13

About what percentage of the world's stock market opportunities are outside the U.S.?

Accepted Answer

A)   one fourth
B)   one third
C)   one half
D)   two thirdsE) B) and D)
F) A) and D) C

Question 14

The largest bank participant in the ADR business is

Accepted Answer

A)   Bank of New York.
B)   Shawmut Bank.
C)   Chase Manhattan Bank.
D)   World Bank.E) A) and C)
F) A) and B)

Question 15

An ADR analog in the Euromarket is the

Accepted Answer

A)   Euro Depository Receipt (EDR) .
B)   Global Depository Receipt (GDR) .
C)   Universal Depository Receipt (UDR) .
D)   Cross-Market Depository Receipt (CDR) .E) All of the above
F) None of the above

Question 16

The original motivation for international investing was primarily

Accepted Answer

A)   to increase returns.
B)   to reduce risk.
C)   to satisfy public demand.
D)   to satisfy regulatory requirement.E) A) and B)
F) None of the above

Question 17

Securities are not traded out of or into a unit investment trust.

Accepted Answer

A) True 
 B)False

Question 18

Closed-end country funds often sell at a discount from net asset value.

Accepted Answer

A) True 
 B)False

Question 19

People invest in international securities primarily due to their

Accepted Answer

A)   growth potential
B)   price stability
C)   limited risks
D)   information availabilityE) C) and D)
F) A) and B)

Question 20

If a U.S. investor earns 20% in a pound denominated investment while the U.S. dollar appreciated approximately 5%, the return to the U.S., investor was approximately 25%.

Accepted Answer

A) True 
 B)False

Exam 15: Investing Internationally

Economic risk is made up of country and political risks.

Correct AnswerverifiedShow Answer

A single ADR may represent more than one share of a foreign company.

Correct AnswerverifiedShow Answer

A sponsored ADR is issued with the blessing of

Correct AnswerverifiedShow Answer

Which of the following statements regarding international investments is most correct?

Correct AnswerverifiedShow Answer

Rates of return to U.S. investors in emerging markets should be higher than returns in the U.S.

Correct AnswerverifiedShow Answer

Low per capita GNP is a common theme of countries where emerging market exist.

Correct AnswerverifiedTrue

The percentage of World Bank loans on which the borrowed has defaulted is about

Correct AnswerverifiedShow Answer

There is little or no risk exposure to U.S. investors when they invest in foreign central bank notes.

Correct AnswerverifiedShow Answer

Emerging markets stocks tend to attract income investors.

Correct AnswerverifiedShow Answer

Trading costs in international markets are likely to be

Correct AnswerverifiedA

The two most popular emerging market exposure among pension funds are Asia and Latin America.

Correct AnswerverifiedShow Answer

Today, most institutional funds have at least 5% of their assets in foreign securities.

Correct AnswerverifiedShow Answer

About what percentage of the world's stock market opportunities are outside the U.S.?

Correct AnswerverifiedC

The largest bank participant in the ADR business is

Correct AnswerverifiedShow Answer

An ADR analog in the Euromarket is the

Correct AnswerverifiedShow Answer

The original motivation for international investing was primarily

Correct AnswerverifiedShow Answer

Securities are not traded out of or into a unit investment trust.

Correct AnswerverifiedShow Answer

Closed-end country funds often sell at a discount from net asset value.

Correct AnswerverifiedShow Answer

People invest in international securities primarily due to their

Correct AnswerverifiedShow Answer

If a U.S. investor earns 20% in a pound denominated investment while the U.S. dollar appreciated approximately 5%, the return to the U.S., investor was approximately 25%.

Correct AnswerverifiedShow Answer

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True

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A

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C

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