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InternationalFinancialManagement_5thEd_Eun_TestBank15

InternationalFinancialManagement_5thEd_Eun_TestBank15 - 15...

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15 Student: ___________________________________________________________________________ 1. Under the investment dollar premium system, A . U.K. residents received a premium over the prevailing commercial exchange rate when they sold foreign securities and repatriated the funds to the U.K. B . U.K. residents had to pay a premium over the prevailing commercial exchange rate when they bought foreign currencies to invest in foreign securities. C. None of the above 2. Foreign equities as a proportion of U.S. investors' portfolio wealth rose from about 1 percent in the early 1980s to about ___ percent by 2007. A. 10% B. 23% C. 33% D. 67% 3. In the context of investments in securities (stocks and bonds), portfolio risk diversification refers to: 4. In the graph at right, X and Y represent A. U.S. stocks and international stocks B. international stocks and U.S. stocks C. systematic risk and unsystematic risk D. none of the above 5. You will get more diversification 6. Systematic risk is: 7. The "world beta" measures the A. unsystematic risk B. sensitivity of returns on a security to world market movements C. risk-adjusted performance D. risk of default and bankruptcy
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8. The less correlated the securities in a portfolio, 9. Regarding the mechanics of international portfolio diversification, which statement is true? 10. Systematic risk
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