Which of the Following Reasons Might Explain Why International Investing

question 48

Multiple Choice

Which of the following reasons might explain why international investing might offer diversification benefits?

• A)Companies operating in different countries will be affected differently by international events such as crop failures, energy prices, wars, tariffs, etc.
• B)Since the introduction of the euro, European and U.S. markets have a tendency to move in the same direction on an annual basis
• C)World markets are highly correlated to the U.S. market since the U.S. is the engine of economic growth around the world
• D)U.S. companies operating in foreign countries automatically provide the investor with diversification against foreign currency fluctuations

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Definitions:

Superego

In psychoanalytic theory, the part of the personality that acts as a moral center, imposing ethical standards and social conformity.

Unconscious

The part of the mind that contains thoughts, memories, and desires not within current conscious awareness.

Traumatic Memories

Are deeply distressing or disturbing memories that are associated with experiencing or witnessing traumatic events, which can have long-lasting psychological effects.

Generalized Other

According to Mead, is a person’s image of cultural standards and how they apply to him or her.