Had to post this

Which of the following statements regarding international differences in leverage is least accurate? A) Companies in Japan and France tend to have more debt in their capital structure than firms in the U.S. B) Companies in the U.S. tend to use shorter maturity debt than companies in Japan. C) Companies operating in countries with weak legal systems tend to have greater agency costs. D) Companies operating in countries that have active institutional investors tend to have less financial leverage than firms in countries with less of an institutional presence.




B indeed. Best part is the explanation: Companies in developed countries tend to use more debt with longer maturities than firms in emerging markets, thus companies in the U.S. tend to use longer maturity debt than companies in Japan. Officially an emerging market now, Japan, ladies and gents haha

I have learned that for CFAI everything outside the US is an emerging market.

Well, to be fair it was from Schwes…didn’t want to dwell on ideological issues too much, but it gave me a good laugh today. Every now and then you can even smile while studying =)

Just in case you have some time to spare during the exam… last year I noticed they play around with names in Ethics. There was a mr Ping in a Q and one Q later there was a Mr Pong. I’ve also seen Mr Pitt and his assistant was Aniston Jole.