The Relatively Low Correlation Between the Movement of Stock Markets

question 38

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) different stock markets are not segmented from each other.

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Definitions:

Contract Breach

An act of breaking the terms set out in a contract, which can result in legal action for enforcement or damages.

Capacity

Refers to the legal ability of a party to enter into a contract.

Installation

is the process of setting up or assembling a piece of equipment or system in its place of operation.

Consequential

Referring to outcomes or results that follow as a direct or indirect effect of an action, often used in the context of damages in legal settings.