Which of the Following Reasons Might Explain Why International Investing

question 48

Multiple Choice

Which of the following reasons might explain why international investing might offer diversification benefits?

• A)Companies operating in different countries will be affected differently by international events such as crop failures, energy prices, wars, tariffs, etc.
• B)Since the introduction of the euro, European and U.S. markets have a tendency to move in the same direction on an annual basis
• C)World markets are highly correlated to the U.S. market since the U.S. is the engine of economic growth around the world
• D)U.S. companies operating in foreign countries automatically provide the investor with diversification against foreign currency fluctuations

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Definitions:

Depreciated

Describes the reduction in value of an asset over time, often due to wear and tear or obsolescence.

Current

Pertaining to the present time or most recent; also refers to assets and liabilities expected to be used or paid within a year.

Annual Sales

The total revenue generated from sales of goods or services by a company in one fiscal year.

Product Line

A group of related products marketed under a single brand name by the same company.