The Relatively Low Correlation Between the Movement of Stock Markets

question 86

Multiple Choice

The relatively low correlation between the movement of stock markets in different countries indicates that

• A) diversifying a portfolio will increase the risk of investing.
• B) most countries face similar economic conditions.
• C) countries pursue different macroeconomic policies.
• D) most stock markets are highly segmented from each other.

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Definitions:

Reactant

A substance that undergoes chemical changes in a reaction.

Reaction Intermediate

A transient species formed during a chemical reaction that does not appear in the overall reaction equation.

Consumed

Refers to the use or expenditure of a resource, such as energy or materials, especially until it is depleted.

Formed

Undergone the process of formation or being created or structured in a specific way.