Bekaert and Harvey ["Foreign Speculators and Emerging Equity Markets," Journal

question 25

Multiple Choice

Bekaert and Harvey ["Foreign Speculators and Emerging Equity Markets," Journal of Finance, 2000] found which of the following?

• A) A decrease in the country risk of an emerging market tends to be followed by a fall in equity share prices.
• B) Emerging markets with high country risk tend to have higher betas than markets with low country risk.
• C) Emerging markets with high country risk tend to have less volatile returns than markets with low country risk.
• D) Financial market liberalizations tend to increase local firms' cost of capital.
• E) Financial market liberalizations tend to increase the correlation of emerging markets with the rest of the world.