In Some Respects, Internationally Diversified Portfolios Are Different from a Domestic

question 53

Multiple Choice

In some respects, internationally diversified portfolios are different from a domestic portfolio because:

• A) investors may also acquire foreign exchange risk.
• B) international portfolio diversification increases expected return but does not decrease risk.
• C) investors must leave the country to acquire foreign securities.
• D) all of the above

Understand the concept of target costing and its application in a competitive marketplace.

Analyze the impact of manufacturing cost reductions on product pricing and profitability.

Assess the role of competition-based pricing in setting product prices.

Understand the concept of contribution margin and contribution per machine hour.

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Definitions:

Host-Country National

An individual who is a citizen of the country in which an international company operates, as opposed to an expatriate who originates from the company's home country.

Parent-Country National

An employee who is a citizen of the country in which the employing organization's headquarters is located, working in a branch or subsidiary in another country.

Third-Country National

An individual who is working in a country that is neither their home country nor the country of the company's headquarters to which they are assigned.

International Organization

An organization that sets up one or a few facilities in one or a few foreign countries.