Business Administration 4440Q/R/S/T Study Guide - Market Liquidity, Emerging Markets, Market Maker
19 Apr 2014
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The economic and financial indicators on the last page report. Examine the 12-month changes for the various national indexes. Answer: this question is designed to provide an intuitive understanding of the benefits from international diversification of equity portfolios. The economist is a convenient source for canadian students. It is unlikely that students will find many, if any, national market indexes that have 12- month returns that are even close to the same level as in exhibit 8. 5. Over different time periods, time-specific and country- specific market forces affect each national market in unique ways. Likewise, of course, exchange rates differ over time and affect returns recorded to a common currency (say the us dollar. ) Some markets that previously yielded a positive return will now show a negative return, and vice versa. Answer: an investor in emerging market stocks ought to be concerned with the depth of the market and the market"s liquidity.
