Since Security Returns Tend to Have Low Correlations Among Countries

question 20

Multiple Choice

Since security returns tend to have low correlations among countries,

• A)investors can reduce risk more effectively if they diversify their portfolio holdings internationally rather than purely domestically.
• B)investors who have a domestically diversified portfolio, with exposures across industry types will not gain much from diversifying abroad.
• C)investors who diversify internationally will likely underperform investors who keep all their investments in one country.
• D)none of the above

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Definitions:

Monophyletic Group

A group of organisms that consists of a common ancestor and all its descendants, also known as a clade.

Reproductive Isolation

A set of mechanisms that prevent different species from mating or ensure that if they do mate, their offspring will be sterile or not survive.

Ecological Adaptation

The process by which organisms adjust to new environments or to changes in their current environment, leading to evolutionary changes that enhance survival and reproduction.

Beak Size

The dimension, typically length or depth, of the beak of birds or other animals, which can vary widely among species due to dietary and ecological needs.