ch13 International Equity Markets

The market capitalization (that is, value of firm equity) on the 80 organized stock exchanges tracked by the World Federation of Exchanges at year-end 2018 was $______ billion

74,667

The direct sale of new equity to US public investors is a(n) _______ stock offering

cross

In a(n) ______ market, a clients' orders are filled by ______ who buy and sell inventory for their own accounts.

dealer; dealers

market order

executed at best price available in the market when the order is received

True or false: GRSs are not fully fungible, meaning a GRS purchased on one exchange cannot necessarily be sold on another.

false (they are fully fungible)

The turnover velocity is a measure of liquidity for a stock market defined as the ratio of ______

market transactions over a period of time divided by the stock market's market capitalization

When the proportion of the index a stock represents is determined by its proportion of the total market capitalization of all stocks in the index, the index is said to be

market-value weighted

The listing of ADRs has been found to generate _____ abnormal performance (i.e., return in excess of the expected equilibrium return).

positive

Euronext was formed in 2000 by the merger of ___________.

the Amsterdam Exchange, the Brussels Exchange and the Paris Bourse

The fact that in recent years the majority of cross-listed firms that have delisted from US exchanges continue to trade on ______ suggests that complying with US regulation is burdensome.

the US OTC market

liquidity

the ability of securities to be bought and sold quickly at close to the current quoted price

True or false: Since the beginning of the 1990s, many Latin American companies have listed their stocks on the U.S. exchanges to prime the U.S. equity market for future Yankee stock offerings.

true

Approximately how many ADRs traded on US exchanges in 2015?

400

Rank the exchanges by the market capitalization of the firms traded on them as of 2015.

1. NYSE 2. Nasdaq 3. Japan Exchange Group 4. Shanghai Stock Exchange 5. London SE group

Match the indexes with their countries. 1. FTSE 100 2. S&P 500 3. Nikkei 225 4. M-DAX 5. Hang Seng 6. Kospi

1. UK 2. US 3. Japan 4. Germany 5. Hong Kong 6. South Korea

Cross-listing in a country with strict securities regulation limits agency problems and reduces the cost of capital according to the

bonding theory

Which regions' equities does the MSCI EAFE Index seek to track?

Europe, Australasia, and the Far East

The type of equity that trades globally is known by the initials

GRS

A limit order is held in a limit order ________ until it can be executed at a price equal to or better than the limit price

book

Which are common reasons for firms to cross-list their shares?

It can signal strong corporate governance. It establishes name recognition in foreign markets. It can broaden the investor base, improve liquidity, and increase the share price.

For foreign firms desiring to have their shares traded only among large institutional investors rather than listed on an exchange, less rigorous accounting and disclosure requirements apply under ______

SEC Rule 144A

limit order

an order away from the market price that is held until it can be executed at the desired price

The direct sale of new equity to US public investors is a(n)

Yankee stock offering

agency market

a market in which the broker takes the client's order through the agent, who matches it with another public order

dealer market

a market in which the broker takes the trade through the dealer, who participates in trades as a principal