--%>

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 : Case study of gene expression analysis

    The paper by Golub et al. that was the focus of the second part of the BioConductor practical was the first analysis of its kind, demonstrating that gene expression analysis could potentially be used to classify leukaemia sub-types. Since its publication in 1999 there

  • Q : Modeling Cases DRAFT TV COMMERCIALS

    Source: O'Conner, G. C., T.R. Willemain, and J. MacLachlau, 1996. "The value of competition among agencies in developing ad compaigns: Revisiting Gross's model." Journal of Advertising 25:51-63. Modeling Cases

  • Q : Calculate the PV You expect the price

    You expect the price of the stock 3 years from now to be $119.04 (i.e., you expect P ˆ   3  ?? = $119.04). Discounted at a 10% rate, what is the present value of this expected future stock price? In other words, calculate the PV of $119.04.&nb

  • Q : Define uniform cost manual Give a brief

    Give a brief introduction of the term ‘uniform cost manual’. And also write down its different contents?

  • Q : Benefit of Electronic Funds Transfer

    Illustrate the benefit of Electronic Funds Transfer?

  • Q : Case study of Espresso Tax Seattle is

    Seattle is currently considering a 10-cent tax on espresso drinks to pay for pre-school and day-care programs. The legislation’s sponsor, Rep. Burbank, argues that people who spend $3-5 on exotic espresso based coffee drinks can afford – and will be &ldquo

  • Q : Procedure of bringing new international

    Describe the procedure of bringing the new international bond issue to the market.

  • Q : Balance of payments deficit or surplus

    Describe how country may run an overall balance of payments deficit or surplus.

  • Q : What is Asset Disposition Asset

    Asset Disposition: Getting rid of the asset or security via a direct sale or some other technique. Quite frequently you will observe insider trades report a "disposition" of some number of shares; this merely means that they sold them.

    Q : Determining interest rate parity

    Presently, spot exchange rate is $1.50/£ and three-month forward exchange rate is $1.52/£. Three-month interest rate is 8.0% per annum within the U.S. and 5.8% per annum within the U.K. Suppose that you can borrow as much as $1,500,000 or £1,000,000.