An Internationally Diversified Portfolio

question 40

Multiple Choice

An internationally diversified portfolio:

• A) should result in a portfolio with a lower beta than a purely domestic portfolio.
• B) has the same overall risk shape as a purely domestic portfolio.
• C) is only about 12% as risky as the typical individual stock.
• D) all of the above

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Definitions:

Erikson

A developmental psychologist known for his theory on the psychosocial development of humans, which posits that individuals go through eight stages of development throughout life.

Psychological Closeness

The perceived intimacy or connectedness between individuals, which can influence the depth of personal relationships and interactions.

Intimacy

The emotional or psychological closeness and trust built between individuals through shared experiences and personal exchanges.

Trust

A psychological state comprising the intention to accept vulnerability based upon positive expectations of the intentions or behavior of another.