2022年Ch-International-Equity-Markets说课材料 .pdf

Ch013-I nt er nat i onal -Equi t y- Mar ket s名师资料总结 - - -精品资料欢迎下载 - - - - - - - - - - - - - - - - - - 名师精心整理 - - - - - - - 第 1 页，共 12 页 - - - - - - - - - Eun & Resnick 4e CHAPTER 13 International Equity Markets A Statistical Perspective Market Capitalization of Developed Countries Market Capitalization of Developing Countries Measures of Liquidity Measures of Market Concentration Market Structure, Trading Practices, and Costs International Equity Market Benchmarks iShares MSCI International Finance in Practice: Foreign Interest in South Africa Takes Off Trading in International Equities Cross-Listing of Shares Yankee Stock Offerings The European Stock Market American Depository Receipts Global Registered Shares Factors Affecting International Equity Returns Macroeconomic Factors Exchange Rates Industrial Structure Summary MINI CASE: San Pico s New Stock ExchangeA Statistical Perspective 1A “primary ” stock market is a) A big internationally-important market like the NYSE b) A market where corporations issue new shares to initial investors c) Where brokers and market makers trade d) None of the above Answer: b) Market Capitalization of Developed Countries 2The market cap of the developed world a) Is about 90 percent of the market cap of the entire world b) Is about 80 percent of the market cap of the entire world c) Is about 70 percent of the market cap of the entire world d) Is about 60 percent of the market cap of the entire world Answer: a) 名师资料总结 - - -精品资料欢迎下载 - - - - - - - - - - - - - - - - - - 名师精心整理 - - - - - - - 第 2 页，共 12 页 - - - - - - - - - Market Capitalization of Developing Countries 3In general, Standard & Poors Emerging Markets Data Base classified a stock market as “emerging ” ifa) It is located in a low- or middle-income economy as defined by the World Bank b) Its investable market capitalization is low relative to its most recent GNI figures c) a) or b) d) none of the above Answer: c) 4Investment in foreign equity markets a) Is a real “backwater ” in financeb) Became common practice in the 1980s as investors diversified their portfolios. c) During the 1980s was largely confined to the developed world d) All of the above Answer: d) 5In mutual funds, investment in emerging foreign equity markets a) Represents less than one percent of investments in U.S.-based mutual funds. b) Represents about five percent of investments in U.S.-based mutual funds. c) Represents more than twenty percent of investments in U.S.-based mutual funds. d) Declined during the 1990s Answer: a) Measures of Liquidity 6Which investment is likely to be the most liquid: a) A share of publicly traded company trading on the NYSE. b) A bond issued by a Fortune 500 company. c) A house in a nice part of town. d) a) and b) are equally liquid Answer: a) Rationale: bonds really arent that liquidespecially when compared to stocks. 7A measure of “liquidity” for a stock market isa) the turnover ratio b) the ratio of stock market transactions over a period of time divided by the size, or market capitalization, of the stock market c) the LIBOR rate d) a) and b) Answer: d) 名师资料总结 - - -精品资料欢迎下载 - - - - - - - - - - - - - - - - - - 名师精心整理 - - - - - - - 第 3 页，共 12 页 - - - - - - - - - 8As a measure of “liquidity” a) Generally, the lower the turnover, the greater the liquidity of a secondary stock market. b) Generally, the higher the turnover, the greater the liquidity of a secondary stock market. c) The more a financial asset gurgles when shook the greater the liquidity d) None of the above Answer: b) 9Many of the small foreign equity markets (e.g. Chile, Sri Lanka) a) Have poor liquidity at present. b) Are very liquid stock markets, since the poor people living there are eager to sell their securities. c) Have fairly high turnover ratios indicating strong liquidity. d) None of the above Answer: a) 10 In general if an investment a) Has poor liquidity it should offer investors a liquidity premium. b) Can be sold fairly quickly at a fair price, it has good liquidity c) a) and b) d) None of the above Answer: c) 11 Many of the larger foreign equity markets (e.g. Korea, India) a) Have poor liquidity at present. b) Are very liquid stock markets, since the poor people living there are eager to sell their securities. c) Have high turnover ratios d) None of the above Answer: c) Measures of Market Concentration 12 The more concentrated a national stock market is a) The greater opportunity a global investor has to include shares from that county in an internationally diversified portfolio. b) The less opportunity a global investor has to include shares from that county in an internationally diversified portfolio. c) The broader the investor base across a number of different shares and industries. d) None of the above Answer: b) 名师资料总结 - - -精品资料欢迎下载 - - - - - - - - - - - - - - - - - - 名师精心整理 - - - - - - - 第 4 页，共 12 页 - - - - - - - - - Market Structure, Trading Practices, and Costs 13 The secondary stock markets a) Are the markets for “pre-owned” or “used” shares of stockb) Provide marketability to shares. c) Provide price discovery or share valuation. d) All of the above Answer: d) 14 Price discovery in the secondary stock markets a) Occurs due to the competitive trading between buyers and sellers, just like on eBay. b) Is set once a day at the close. c) Is set by the investment bankers at the IPO. d) All of the above Answer: a) 15 A market order a) Is an instruction from a customer to a broker to buy or sell at the best price available when the order is received (immediately) b) Is an instruction from a customer to a broker to buy or sell in a particular market (e.g. NYSE). c) Is always and everywhere “fill or kill”.d) Is always and everywhere “good till cancelled”.Answer: a) Rationale: c) and d) are tempting, but you should always be suspicious of answer choices that include “always and everywhere” there s got to be an exception sometimes or somewhere. 16 A limit order a) Is an instruction from a customer to a broker to buy or sell in at a particular price (or better) b) Can be a “day order”that is the order is cancelled if not executed during that days trading.c) Can be “good till cancelled”.d) All of the above Answer: d) 17 Dealers in an OTC market a) Stand ready to buy at the bid and sell at the ask price. b) Set their own bid and ask prices c) Do not charge commissions d) All of the above Answer: d) 名师资料总结 - - -精品资料欢迎下载 - - - - - - - - - - - - - - - - - - 名师精心整理 - - - - - - - 第 5 页，共 12 页 - - - - - - - - - 18 The OTC market a) Does not accept credit “ only take cash”b) Is a dealer market c) Includes the NASDAQ in the U.S. d) b) and c) Answer: d) 19 A “specialist”a) Makes a market by holding an inventory of a particular security, like IBM or Intel, b) Is a participant on the floor of the exchange, like the NYSE c) Has a designated station on the floor of the exchange d) All of the above Answer: d) 20 A crowd of floor traders on the NYSE a) May arrive at a more favorable price for their clients “inside ” the specialists bid and ask quotes. b) Are obliged to execute their trades through a specialist. c) Are allowed to “front run” their own trades ahead of customer trades.d) All of the above Answer: a) 21 A specialist on the NYSE a) Is obliged to fill limit orders if they are more favorable than the specialists posted bid and ask quotes. b) Is obliged to fill limit orders at the specialists posted bid and ask quotes.c) Is actually a computer program, not a human d) a) and c) Answer: a) 22 A “call market”a) Is OTC and over-the-phone b) Features an agent of the exchange that accumulates a batch of orders that are periodically executed by written or verbal auction throughout the day. c) Provides traders with execution at certain prices. d) b) and c) Answer: b) 23 The Toronto Stock exchange a) Is a fully automated b) Features electronic matching of public orders c) Has continuous order flow d) All of the above Answer: d) 24 “Call market” and “crowd trading” take place on 名师资料总结 - - -精品资料欢迎下载 - - - - - - - - - - - - - - - - - - 名师精心整理 - - - - - - - 第 6 页，共 12 页 - - - - - - - - - a) a non-continuous exchange trading system b) a continuous trading exchange system c) non-continuous markets and continuous markets, respectively d) continuous markets and non-continuous markets, respectively Answer: a) 25 Comparing agency versus dealer markets, which combination of the following statements is true: (i)- In a “dealer market,” the broker takes the clients order through the agent, who matches it with another public order. (ii)- In an “agency market,” the broker takes the trade through the dealer, who participates in trades as a principal by buying and selling the security for his own account. (iii)- In an “agency market,” the broker takes the clients order through the agent, who matches it with another public order. (iv)- In a “dealer market,” the broker takes the trade through the dealer, who participate in trades as a principal by buying and selling the security for his own account. (v)- An agent can be viewed as a “broker s broker.”(vi)- A dealer can be viewed as a “broker s broker.”a) (i), (ii), and (v) b) (i), (ii), and (vi) c) (iii), (iv), and (v) d) (iii), (iv), and (vi) Answer: c) International Equity Market Benchmarks 26 A market-value index a) Is calculated such that the proportion of the index a stock represents is determined by its proportion of the total market capitalization of all stocks in the index. b) Is calculated as the average price of all the stocks in the index that trade that day, one example is the NASDAQ. c) Is calculated like the DJIA d) None of the above Answer: a) 名师资料总结 - - -精品资料欢迎下载 - - - - - - - - - - - - - - - - - - 名师精心整理 - - - - - - - 第 7 页，共 12 页 - - - - - - - - - iShares MSCI 27 iShares MSCI are: a) Exchange traded funds that are subject to U.S. SEC and IRS diversification requirements. b) Open-end mutual funds sold OTC. c) Exchange traded funds that are NOT subject to U.S. SEC and IRS diversification requirements. d) None of the above Answer: a) Trading in International Equities Cross-Listing of Shares 28 A firm may cross-list its share to: a) establish a broader investor base for its stock b) establish name recognition in foreign capital markets, thus paving the way for the firm to source new equity and debt capital from investors in different markets c) expose the firms name to a broader investor and consumer groupsd) All of the above Answer: d) 29 Companies domiciled in countries with weak investor protection can reduce agency costs between shareholders and management a) By moving to a better county b) By listing their stocks in countries with strong investor protection c) By voluntarily complying with the provisions of the U.S. Sarbanes-Oxley Act d) Having a press conference and promising to be nice to their investors. Answer: b) 30 Benetton, an Italian clothier, is listed on the New York Stock Exchange. a) This decision provides their shareholders with a higher degree of protection than is available in Italy. b) This decision can be a signal of the companys commitment to shareholder rights.c) This may make investors both in Italy and abroad more willing to provide capital and to increase the value of the pre-existing shares. d) All of the above Answer: d) Yankee Stock Offerings 31 “Yankee” stock offerings are a) shares in foreign companies originally sold to U.S. investors b) dollar-denominated shares in foreign companies originally sold to U.S. investors c) U.S. stocks held abroad d) none of the above. Answer: b) 名师资料总结 - - -精品资料欢迎下载 - - - - - - - - - - - - - - - - - - 名师精心整理 - - - - - - - 第 8 页，共 12 页 - - - - - - - - - 32 Which factors fuel the sale of “Yankee” stock offerings?a) Privatization by many Latin American and Eastern European government-owned companies b) The rapid growth in the economies of the developing world c) The expected large demand for new capital by Mexican companies now that NAFTA has been approved. d) All of the above Answer: d) The European Stock Market 33 Following monetary union and the advent of the euro: a) The countries of the European union have enacted common securities regulation b) A pan-European stock exchange has developed in London, similar to the NYSE in scope and trading practices. c) Development of a common securities regulations, even among the countries of the European Union, has not as yet occurred d) None of the above Answer: c) 34 The European Stock Exchange, comparable to the NYSE being the U.S. Stock Exchange: a) Is located in Milan b) Is located in London c) Is located in Frankfurt d) None of the above Answer: d) Rationale: it doesnt exist yet.American Depository Receipts 35 American Depository Receipt (ADRs) represent foreign stocks: a) denominated in U.S. dollars that trade on European stock exchanges b) denominated in U.S. dollars that trade on a U.S. stock exchange c) denominated in a foreign currency that trade on a U.S. stock exchange d) non-registered (bearer) securities Answer: b) 36 Yankee stocks a) often trade as ADRs and have higher risks than trading the actual shares b) often trade as ADRs and have lower risks than trading the actual shares c) are bank receipts representing a multiple of foreign shares deposited in a U.S. bank d) b and c Answer: d) 名师资料总结 - - -精品资料欢迎下载 - - - - - - - - - - - - - - - - - - 名师精心整理 - - - - - - - 第 9 页，共 12 页 - - - - - - - - - 37 ADRs a) Are American Depository Receipts b) denominated in U.S. dollars that trade on a U.S. stock exchange c) are depository receipts for foreign stocks held by the U.S. depositorys custodiand) all of the above Answer: d) 38 Sponsored ADRs a) Created by a bank at the request of the foreign company that issued the underlying security. b) Can trade on the NASDAQ c) Can trade on the NYSE d) All of the above Answer: d) 39 ADR trades a) Clear in three days, just like trades in U.S. shares b) Settle only after the trade in the underlying stocks clear, which can take time depending on the clearing practices of the national market. c) Are price in the currency of the underlying security d) all of the above Answer: a) 40 On the Paris bourse, shares of Avionelle trade at ?45. The spot exchange rate is $1.40 = ?1.00. What is the no -arbitrage U.S. dollar price of an ADR? Assume that transactions costs are negligible. a) $63 b) $32.14 c) $45 d) $45.50 Answer: a) 41 ADRs a) Frequently represent a multiple of the underlying shares b) Can trade on the NYSE c) Can trade on the NASDAQ d) All of the above Answer: d) Rationale: Sponsored ADRs trade on NASDAQ or major exchanges. 名师资料总结 - - -精品资料欢迎下载 - - - - - - - - - - - - - - - - - - 名师精心整理 - - - - - - - 第 10 页，共 12 页 - - - - - - - - - 42 In the London market, Rolls-Royce stock closed at 0.875 per share on Thursday, April 17, 2005. Rolls Royce trades as an ADR in the OTC market in the United States. Five underlying Rolls-Royce shares are packaged into one ADR. On April, 17, 2005, the British Pound sterling to the U.S. spot exchange rate was 0.6366/$1.00. The no-arbitrage U.S. price