Home Bias Tends to

question 61

Multiple Choice

Home bias tends to

• A) reduce diversification.
• B) increase contagion.
• C) increase diversification.
• D) reduce contagion.
• E) increase the price of domestic bonds.

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Definitions:

Maturity Value

The amount that will be paid to the holder of a financial instrument at its maturity date, including both the principal and any final interest payments.

Issued Note

A financial instrument representing a promise to pay a specified amount of money at a future date.

Accrued Interest

Interest that has been earned but not yet received in cash or recorded as an asset on the balance sheet.

Note Receivable

A financial asset representing a written promise to receive a specific amount of money on a certain date or on demand.