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

question 25

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 tying 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:

Glaciers

Large masses of ice that move slowly over land, formed by the accumulation and compaction of snow, and can shape landscapes through erosion.

Lakes

Large bodies of water surrounded by land, usually freshwater, but they can also be salty in some regions.

Groundwater

Water that is found underground in the cracks and spaces in soil, sand, and rock, which can form aquifers from which water can be extracted for use.

Ice Caps

Large mass of ice that covers less than 50,000 square kilometers of land area, usually found in high-latitude regions; smaller than ice sheets.