Question 11 According to, "Global Capital Markets," a positive feature of global financial integration is: Greater opportunities for portfolio diversification. The ability of small countries to attract capital flows several times the size of domestic GDP. The greater control over the nation's exchange rate afforded by free flows of financial capital. The improved ability of governments to tax owners of financial capital. Question 12 According to, "Global Capital Markets," asymmetric information is particularly acute in the area of global capital flows due to the presence of: The failure of foreign investors to properly research investment opportunities abroad. Exchange rate risk. O The complete lack of legal protections afforded foreign capital by recipient countries. Cultural differences between the borrower and the lender