Question 49

International Risk: Exchange rate risk imparts an extra source of uncertainty to investments

dominated in foreign currencies. To this end, political risk in international markets is generally a

risk factor as well. International equities are generally subdivided into developed and emerging

markets

True

False

Question 50

DCF: Discounted cash flow models give estimates of the intrinsic value (V) of a stock that in

turn, can be compared to market prices (P) for purchase (buy when V > P) or sale (sell when V <

P) decision making. The discounted cash flows, in general, are the free cash flows that can be

returned to the capital providers

True

False

Question 51

Good Companies as Good Investments. Good companies are not necessarily good investments.

Stock market prices of successful firms may be bid up to levels that reflect that success, or

perhaps more. These firms are often labeled glamour firms and have high, embedded growth and

/ or profitability expectations.

True

False

Question 52

Out of the Money Call Option. An out-of-the-money call option would be where the stock price

is greater than the exercise price.

True

False