Why Is Investing in Foreign Companies an Effective Way to Diversity

question 11

Multiple Choice

Why is investing in foreign companies an effective way to diversity an individual's investment portfolio?

• A)Foreign economies are stronger than the U.S.economy.
• B)Foreign stocks are less risky than the stocks of U.S.corporations.
• C)Stock returns of companies in foreign companies are highly correlated with stock returns of U.S.companies.
• D)Returns on foreign company stocks do not always change in the same direction as returns on U.S.stocks.

---

Definitions:

Technology

Implementing scientific insights for real-world applications, chiefly in the field of industry.

Unemployment

The situation where individuals who are able and willing to work cannot find employment.

Opportunity Cost

The cost of forgoing the next best alternative when making a decision or choosing between options.

OLED TVs

Televisions that use Organic Light-Emitting Diodes for a better display with higher contrast, deeper blacks, and a wider viewing angle compared to traditional LCDs.