Which of the Following Is an Example of U

question 133

Multiple Choice

Which of the following is an example of U.S. foreign portfolio investment?

• A)Albert, a German citizen, buys stock in a U.S.computer company.
• B)Erica, a U.S.resident, buys bonds issued by the Swiss government.
• C)A U.S.based restaurant chain opens new restaurants in India.
• D)A U.S.citizen builds and operates a coffee shop in the Netherlands.

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Definitions:

Sharpe Measure

A method to evaluate the risk-adjusted return of an investment, comparing portfolio excess return to the standard deviation of the portfolio.

Excess Returns

The return on an investment above the return expected from risk-free investments or the market's benchmark.

Risk-free Asset

An investment that is assumed to have no risk of financial loss, often exemplified by government bonds.

Kurtosis

A statistical measure that describes the shape of a distribution's tails in relation to a normal distribution, indicating the potential for extreme outcomes.