In Some Respects, Internationally Diversified Portfolios Are the Same in Principle

question 50

Multiple Choice

In some respects, internationally diversified portfolios are the same in principle as a domestic portfolio because:

• A) the investor is attempting to combine assets that are perfectly correlated.
• B) investors are trying to reduce systematic risk.
• C) investors are trying to reduce the total risk of the portfolio.
• D) all of the above

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Definitions:

Statute of Frauds

A law that requires certain types of contracts to be in writing and signed to be legally enforceable.

Enforceability

The characteristic of a legal agreement or obligation that makes it legally binding and capable of being upheld or imposed in a court of law.

Reliance

The act of depending or trusting in something or someone, often involves confidence placed in a party during contractual agreements.

Specific Performance

A legal remedy in contract law requiring a party to execute the contract according to its exact terms rather than paying monetary damages.