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If Foreign Securities Markets Are as Efficient as American Securities

question 3

True/False

If foreign securities markets are as efficient as American securities markets, then foreign investments may offer the U. S. investor no advantages over investing in domestic securities.

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Definitions:

Black Scholes Model

A mathematical model of a financial market containing derivative investment instruments, used to price European options.

Dividend Yield

A ratio demonstrating the yearly dividends a company distributes in relation to its share price.

Exercise Price

The price at which an option holder can buy or sell the underlying security.

Protective Put

An options strategy wherein an investor holds a long position in a stock and buys put options on that same stock to protect against the stock's decline in price.

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