Internationally Diversified Portfolios Often Have a Lower Rate of Return

question 20

True/False

Internationally diversified portfolios often have a lower rate of return and almost always have a higher level of portfolio risk than their domestic counterparts.

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Definitions:

External Benefit

A benefit that affects parties other than the buyers or sellers involved in a transaction, similar to a positive externality.

Traffic Congestion

A condition on road networks that occurs as use increases, characterized by slower speeds, longer trip times, and increased vehicular queuing.

Externality

An externality is a side effect or consequence of an industrial or commercial activity that affects other parties without this being reflected in market prices.

Pollution Reduction

The process or policy of decreasing the amount of pollutants released into the environment, often to protect ecological health and human safety.