Which of the following is an example of a systematic risk? Bond investor invests in a Japanese investment grade bond and receives coupon payments in Japanese yens A firm hires a former politician with ties to the Republican party when a political climate in the state changes U.S. government announces an increase in corporate tax rate Bond investor receives news about a bond issuer issuing another corporate bond

Which of the following is an example of a systematic risk? Bond investor invests in a Japanese investment grade bond and receives coupon payments in Japanese yens A firm hires a former politician with ties to the Republican party when a political climate in the state changes U.S. government announces an increase in corporate tax rate Bond investor receives news about a bond issuer issuing another corporate bond

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter18: Long-term Debt Financing

Section: Chapter Questions

Problem 1ST

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The risk of investing in foreign stock markets depends on exchange rate uncertainty more than the risk of investing in foreign bonds. Select one: True False
Investors who want to maximize their investment returns must consider investing in foreign securities in addition to their domestic investments. Foreign securities are often considered more risky than domestic investments. What should be considered when deciding whether to invest in foreign securities? Include a discussion of exchange rate risk and country risk. Foreign economic, political, and legal risks should also be included. Include any other risks that you deem important.
Why are UK government bonds considered a risk-free investment? Discuss the risk of exposed to market.
Banker’s Acceptances allow corporations in different countries to trade with each other because they have very close relationship and trust each other. True False The yield to maturity is the annualized discount rate that equates the future coupon and principal payments to the initial proceeds received from the bond offering. True False
True of False Bond holders have voting rights and common shareholders do not. Because the likelihood of the U.S. Government paying back their debts is nearly 100%, U.S. bonds are classified as "risk free" investments. In general, a project or investment with a high standard deviation is viewed as less risky than one with a low standard deviation. When the present value of a bond exceeds the future value of the bond, it is selling at a premium. Preferred stock has an advantage over common stock because preferred shareholders have voting rights and common stock holders do not.
Which of the following defines a hedge fund the most? 1. A collective investment model based on issuing a fixed number of shares which are not redeemable from the fund. 2. A negotiable security that represents securities of a foreign company and allows that company's shares to trade in the U.S. financial markets. 3. A diversified portfolio that typically does not limit the number of shares it can offer, and they are bought and sold on demand. 4. A type of investment fund that trades in relatively liquid assets and is able to make extensive use of more complex trading, portfolio construction and risk-management techniques to improve performance.
As the investment manager of the Oman investment fund, you wish to have a well-diversified international bond portfolio? What types of risks can be reduced by investing in such a portfolio
True or false I. Floating/ variable rate bonds is one in which the interest payment changes with the market conditions. II. Junk or low rated bonds are rated BB or below.III. Eurobonds are bonds payable or denominated in the borrower’s currency, but sold outside the country of the borrower, usually by an international syndicate of investment bankers. IV. Treasury bonds carry the “full-faith-and-credit” backing of the government and investors consider them among the safest fixed-income investments in the world.
Assess the impact of the COVID-19 pandemic on the bond market in the USA.
To strengthen the dollar using sterilized intervention, the Fed would ____ dollars and simultaneously ____ Treasury securities. A. sell; sell B. sell; buy C. buy; sell D. buy; buy
Which of the following facilitates trading of short term corporate bonds in an economy? Select one: A. Capital Market B. All of the given options C. Money Market D. Foreign Exchange Market
Finance What do we call foreign stocks that are bought and sold in the U.S. that are also priced in U.S. dollars? What are these stocks called? Multiple Choice There is no such thing. Foreign stocks must be purchased using that countries foreign currency. They are called SDRs. They are called American Depository Receipts (ADRs) Thev are called U.S. Foreign Dollar Certificates (USDCs). Detail explaination

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		Bond investor invests in a Japanese investment grade bond and receives coupon payments in Japanese yens
		A firm hires a former politician with ties to the Republican party when a political climate in the state changes
		U.S. government announces an increase in corporate tax rate
		Bond investor receives news about a bond issuer issuing another corporate bond