International Business Competing in the Global Marketplace 11th Edition By Hill Dr, Charles W. L – Test Bank

International Business Competing in the Global Marketplace 11th Edition By Hill Dr, Charles W. L – Test Bank

Chapter 12
The Global Capital Market

True / False Questions

1. A capital market brings together those who want to invest money and those who want to borrow money.

True False

2. An investor purchases the right to receive a specified fixed stream of income from the corporation when he purchases a share of stock.

True False

3. Debt loans include cash loans from banks and funds raised from the sale of corporate bonds to investors.

True False

4. The cost of capital is the difference between cost of inputs and outputs.

True False

5. By using the global capital market, investors have a much wider range of investment opportunities than in a purely domestic capital market.

True False

6. Investors can reduce the level of risk by diversifying a portfolio internationally.

True False

7. The relatively low correlation between the movements of stock markets in different countries indicates that countries face different economic conditions.

True False

8. Using floating exchange rates will help countries reduce the risk of investing in foreign assets.

True False

9. Financial services is an information-intensive industry.

True False

10. Global capital market often lack information about the fundamental quality of foreign investments.

True False