Investors Are Able to Reduce Risks by Diversifying an Investment

question 88

Multiple Choice

Investors are able to reduce risks by diversifying an investment portfolio internationally, and the risk reduction effects would be greater if not for

• A) volatile exchange rates associated with the current floating exchange risk regime.
• B) the different kinds of tax regimes in different countries.
• C) the inaccessibility of foreign stock exchanges to most investors.
• D) the poor quality of many stocks in international start-up firms.

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Definitions:

SES Group

Socioeconomic status group, categorizing individuals or families based on income, education, and job status.

Socioeconomic Status

A measure of an individual's or family’s social standing or class, determined by a combination of income, education, and occupation.

Neighborhood

A localized community within a larger town, city, or suburb, characterized by social interactions and shared spaces among its inhabitants.

Political Beliefs

Individual or collective opinions and convictions about political systems, policies, and leaders.