Which of the Following Is a Reason a Company Might

question 9

Multiple Choice

Which of the following is a reason a company might cross-list itself on a foreign stock exchange?

• A) It wants to hedge against currency fluctuations.
• B) It is less expensive than listing itself solely on a domestic exchange.
• C) It wants to obtain acquisition currency for acquiring a foreign company.
• D) It is required for accomplishing foreign direct investment.

Recognize the impact of stock volatility on option pricing.

Evaluate the effects of dividend policies on option values.

Understand the mechanisms of exercising options and the strategic motivations behind them.

Grasp the basics of option valuation models, including the Black-Scholes model.

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Definitions:

Reserve Ratio

The fraction of deposits that banks are required to hold in reserve and not lend out, set by central banks to control the money supply and banking stability.

Depository Institutions Deregulation and Monetary Control Act

A U.S. federal law enacted in 1980 aimed at improving the Federal Reserve's control over monetary policy, deregulating certain aspects of the banking industry.

Legal Reserve Requirements

Legal reserve requirements are regulations set by a central bank that determine the minimum amount of reserves that must be held by a financial institution.

Depository Institutions

Depository Institutions are financial entities such as banks and savings associations that accept deposits from individuals and provide loans.