16 Questions
Why is global industry analysis important for valuing companies?
To analyze and evaluate competitive forces that will affect returns
What is one of the challenges encountered when investing in foreign stocks?
Gaining familiarity with the operations, trading mechanisms, costs, and constraints of foreign markets
What should the portfolio manager's investment approach be when investing in foreign stocks?
Global
What does international company analysis aim to produce?
Expected return and risk exposure
Why is understanding differences in national accounting standards important when analyzing international companies?
To adjust data for comparability
What does the expected return on an investment include?
Potential price appreciation over some period
What is the purpose of risk analysis?
To find securities with superior expected returns in the presence of domestic and international risks
Why does information constraint pose a problem for investment organizations when obtaining information from foreign firms?
Both a and b
What is the main challenge faced by investment organizations in structuring their international research effort?
Perceiving major factors influencing stocks returns
How do investment organizations differ in their approach to international research based on their vision of the world?
Both a and c
What is the role of national accounting standards in investment organizations' analysis?
To make an adjustment for meaningful comparison across companies
Why is quantifying risk analysis important for investment organizations?
To find securities with superior expected returns in the presence of domestic and international risks
What are the key factors that risk sensitivity measures how much a company’s value responds to?
Economic activity, interest rates, energy costs, and general market conditions
What is the objective of security analysis?
To determine relative misevaluation of investments within the same industry
What major approaches do investment organizations use for international research based on their vision of the world?
Global industrial sectors, country-to-country basis, and style investing
What problem does difficulty in obtaining information from foreign firms pose for investment organizations?
Difficulty to obtain relevant information
Test your knowledge on analyzing industries in a global context and evaluating competitive forces that affect returns, providing a foundation for security valuation decisions. The quiz covers problems encountered in investing in foreign stocks and the necessary familiarity and approach required for portfolio managers.
Make Your Own Quizzes and Flashcards
Convert your notes into interactive study material.
Get started for free
