Suppose That You Overheard the Following Statements at a Conference

question 5

Essay

Suppose that you overheard the following statements at a conference for institutional investors:
(A German national): "My money manager knows the German firms very well; why should I bother to invest in French and American shares? I am not familiar with their names or their operations, and I will have to pay much higher costs to buy them."
(A French national): "Why should I buy German and American shares? The foreign brokers will give preferential treatment to their domestic clients, and I am going to get a lousy deal in terms of prices and costs. Furthermore, I can't read the financial statements of these companies, as they are written in German or English, and with different accounting methods."
(An American national): "I can't even pronounce the names of these foreign companies; how could I defend investing abroad in front of my board of trustees? By the way, what is the capital of Switzerland: Geneva or Zurich?"
How would you try to convince these people to diversify their portfolios if you were the marketing representative of a big international money manager?

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Definitions:

Weighted Average Float

Weighted average float refers to the average time between when a check is deposited in a bank and when the funds are made available, weighted by the value of each check.

Clearing Times

The period it takes for a transaction to be processed, confirmed, and settled between buyer and seller in the financial markets.

Weighted Average Delay

implies the average time delay in a process or system, adjusted for the importance or frequency of each delay component.