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- Country differences, such as differences in the risk-free interest rate and differences in risk premiums across countries, can cause the cost of capital to vary across countries. The answer to this question in True. Group of answer choices True FalseDiscuss the implications of the deviations from purchasing power parity for countries’ competitive positions in the world marketWhich of the following is an exogenous variable in the G&S market model? Select one: a. The domestic price level b. The GNP of the domestic country c. The GNP of the foreign country d. The unemployment rate in the domestic country e. The financial account balance
- Security returns are found to be less correlated across countries than within a country.Why can this be?Which of the following is negative affects the currency exchange rate bid/ask spread? A. order costs B. currency risk C. volume D. inventory costsDo international differences in financial leverage exist? Explain.
- What is the difference between the concepts of surplus and trade deficit in international trade? Why would you choose one over the other ?4. Explain what Purchasing Power Parity is and whether it actually provides a clear explanation of what is actually happening with the currencies in different countries .The Fisher Effect is a familiar economic theory in the domestic market. Define the Fisher Effect and explain why you think it is also appropriately applied to international markets
- Explain the differences between each of the following and give examples a)domestic market and foreign market b)national market and euromarketsHow might (a) seasonal factors and (b) different growth rates distort a comparative ratio analysis? Give some examples. How might these problems be alleviated?Historical and current exchange rate information is already reflected in today’s exchange rate and is not useful for forecasting. This is referred to: a. Strong-form efficiency or Strong-form efficiency b. Strong-form efficiency c. Semistrong-form efficiency d. Weak-form efficiency