Recent Studies Show That When Investors Control Exchange Risk by Using

question 94

Multiple Choice

Recent studies show that when investors control exchange risk by using currency forward contracts to hedge,

• A)international bond portfolios outperform domestic bond portfolios.
• B)international bond portfolios dominate domestic stock portfolios in terms of risk-return efficiency.
• C)international bond portfolios outperform domestic bond portfolios,and also dominate domestic stock portfolios in terms of risk-return efficiency.
• D)none of the options

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Definitions:

Leisure Class

A segment of society that derives its income from investments, inheritance, or other non-labor sources, allowing its members to focus on leisure activities and cultural pursuits rather than traditional labor.

Tax Rebate

A refund on taxes when the tax liability is less than the taxes paid.

Consumer Spending

The total amount of money spent by households in an economy on goods and services, excluding purchases of new housing.

Durable Goods

Products or goods that are intended to last and are characterized by their long usage or service life, such as appliances, cars, and furniture.