Which of the Following Is Not a Potential Explanation for the Home

question 18

Multiple Choice

Which of the following is not a potential explanation for the home bias in portfolio holdings?

• A) Domestic portfolios allow for hedging inflation risk.
• B) Legal and institutional restrictions.
• C) Taxes and transaction/information costs.
• D) Higher rate of return on domestic stocks.

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Definitions:

Method Of Elimination

A technique for solving systems of equations by removing variables to find a solution that satisfies all equations simultaneously.

Infinitely Many Solutions

A situation where there are limitless solutions that satisfy an equation or system of equations.

Method Of Elimination

A technique for solving systems of equations by eliminating one variable at a time to find the values of the others.

Fractions

Numerical quantities that represent a part of a whole, typically in the form of 'numerator/denominator'.