--%>
Assignment Help - homework help

Evaluation of discount and premium

Describe how discount and premium are evaluated whenever the assets are priced-to-market. When would law of one price prevail within the international capital markets in case foreign equity ownership restrictions are imposed?

E

Expert

Verified

Premium and discount are determined by:

a) Severity of the restrictions imposed on the foreigners and

b) Ability of foreigners to alleviate the effect of these restrictions by using their own domestic securities. In special case where the foreigners may exactly imitate the securities under the restriction, then the PTM will cease to apply.

   Related Questions in Financial Accounting

  • Q : Income Tax and Investment Calculator

    Introduction Your task is to produce a Java program, which can calculate income tax and investment growth based on the yearly income/salary of an individual. Below the details are descr

    		•
  • Q : Issuing dual currency bonds What

    What borrower must consider before issuing the dual currency bonds?

    		•
  • Q : Recommended action for GM to manage its

    General Motors exports the cars to Spain however the strong dollar against the peseta, hurts the sales of GM cars in the Spain. In Spanish market, GM faces the competition from the French and Italian car makers, like Renault and Fiat, whose currencies stays stable wit

    		•
  • Q : Write a Matlab function Fourbar Write a

    Write a Matlab function Fourbar (r1,r2,r3,r4,theta,speed) that animates three cycles of a fourbar linkage having link lengths r1, r2, r3, r4. The function first checks to ensure the mechanism isGrashof (including the change-point c

    		•
  • Q : Explain Direct expenses Explain Direct

    Explain Direct expenses. Also write its main illustrations?

    		•
  • Q : NPV capital budgeting framework Specify

    Specify intuition behind NPV capital budgeting framework?

    		•
  • Q : Accountancy Accountancy is the process

    Accountancy is the process of communicating financial information about a business entity to users such as shareholder and manager. The communication is generally in the form of financial statements that show in money terms the economic resources under the control of management; the art lies in s

    		•
  • Q : Explain the term Company Explain the

    Explain the term Company in reference to Accounting?

    		•
  • Q : Difference among personal or real

    What is the difference among personal or real account and nominal account?

    		•
  • Q : Effects of foreigners portfolio

    Since early 1980s, foreign portfolio investors has purchased a considerable portion of the U.S. treasury bond issues.  Explain some short-term and long-term effects of the foreigners’ portfolio investment over the U.S. balance of payments.

    		•