SOLVED

281. The Reaching Beyond Our Border box in Chapter 19 provides the following advice when trading in foreign stocks? A. Proceed with caution when investing in the stock of a firm where the home country has political unrest and an unstable currency. B. Avoid purchasing ADRs [American Depository Receipts] because you never win with the exchange rates. C. When buying or selling foreign securities, avoid mutual funds and exchange traded funds. They seem to have hidden stocks that are worthless intermixed with some good ones. D. Remember: the lower the risk, the higher the return. 282. According to the “Reaching Beyond Our Borders” box in Chapter 19, one way to reduce the risk of investing in the global financial market is to: A. trade securities with brokers in the foreign country in which you desire to invest. B. invest a significant portion of your portfolio in emerging countries with great growth potential. C. diversify by investing in countries that have a history of political instability. D. consider mutual funds as opposed to individual stocks of foreign companies. 283. Paula’s Pasta Paradise plans to offer their first stock sale to the general public. Prior to selling their stock, the firm must: A. pay dividends to the existing stockholders. B. register its stock offering with the SEC. C. establish an initial selling price that cannot exceed $25 per share. D. determine the brokers that will initially trade their stock offering. 284. After operating for years as a privately held corporation, MidAtlantic Ironworks plans to publicly trade its stock. As a midsized firm, MidAtlantic wants to avoid excessive paperwork, and the fear of being delisted in the future. The ________ provides the best fit for MidAtlantic’s plans. A. over-the-counter market B. New York Stock Exchange C. American Stock Exchange D. secondary market 285. Suzanne wants to purchase stock in a company that is headquartered in Germany. Suzanne: A. will have to place her order through the Frankfurt Stock Exchange. B. cannot legally own the stock of a German corporation. C. can buy the shares from a broker on a U.S. exchange. D. must obtain an investor visa to complete the purchase. Â Â