1．If international markets are integrated, which of the following statements is FALSE? A) The international capital asset pricing model will be valid. B) Risk will be priced similarly in all markets. C) The international risk-free rate will be the appropriate base rate for asset pricing. D) The world market index will be the appropriate pricing standard. The correct answer was C) There is no such thing as an “international risk-free rate,” hence it cannot be used in asset pricing. In broad terms, all other answers will be true in the presence of well-integrated world markets. 2．For the international capital asset pricing model (ICAPM), which of the following is TRUE regarding the integration of national markets? If international markets are: A) integrated, the ICAPM breaks down. B) integrated, there is no need for the ICAPM. C) segmented, the ICAPM breaks down. D) segmented, risk is priced similarly in all markets. The correct answer was C) For the ICAPM to be valid, international markets must be integrated. If markets are segmented, risk will be priced differently in different national markets so the world risk premium will not be a robust comparison measure. 3．Suppose world markets are fully segmented. What will be the effect of segmentation of the international capital asset pricing model (ICAPM)? Risk will be priced: A) differently in each national market and the ICAPM breaks down. B) similarly in each national market and the ICAPM breaks down. C) differently in each national market and the ICAPM will be valid. D) similarly in each national market and the ICAPM will be valid. The correct answer was A) Segmentation means that risk will be priced differently in each national market, hence the ICAPM, which assumes uniform risk pricing, breaks down. | 
发表于 2008-5-14 18:19
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