Ch013 International Equity Markets.docVIP

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 Exchange A Statistical Perspective A “primary” stock market is A big internationally-important market like the NYSE A market where corporations issue new shares to initial investors Where brokers and market makers trade None of the above Answer: b) Market Capitalization of Developed Countries The market cap of the developed world Is about 90 percent of the market cap of the entire world Is about 80 percent of the market cap of the entire world Is about 70 percent of the market cap of the entire world Is about 60 percent of the market cap of the entire world Answer: a) Market Capitalization of Developing Countries In general, Standard Poor’s Emerging Markets Data Base classified a stock market as “emerging” if It is located in a low- or middle-income economy as defined by the World Bank Its investable market capitalization is low relative to its most recent GNI figures a) or b) none of the above Answer: c) Investment in foreign equity markets Is a real “backwater” in finance Became common practice in the 1980s as investors diversified their portfolios. During the 1980s was largely confined to the developed world All of the above Answer: d) In mutual funds, investment in emerging foreign equity markets Represents less than one percent of investments in U.S.-based mut