The Return-Risk Efficiency of an Internationally Diversified Portfolio of Stocks

question 34

True/False

The return-risk efficiency of an internationally diversified portfolio of stocks and bonds can be improved by hedging the currency risk of foreign investments.

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Definitions:

Desensitization

A process in psychology used to reduce phobic or negative reactions to stimuli by gradually exposing the individual to the stimuli in a controlled manner.

Aversive Conditioning

A method of behavior modification that involves using unpleasant stimuli to discourage undesirable behaviors.

Negative Transference

A psychological phenomenon where an individual projects feelings of negativity or hostility from past relationships onto a new person, often a therapist.

Behavioral Contracting

A therapy technique involving a written agreement between a therapist and a client outlining behavior change expectations and rewards.