Since Security Returns Tend to Have Low Correlations Among Countries

question 81

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 options

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Definitions:

Formal Education

Formal education is the structured educational system that encompasses primary, secondary, and higher education, often delivered by certified teachers and following a set curriculum.

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Uniform tests designed to assess and compare the performance of individuals or groups on a specific set of criteria.

Cultural Bias

The inclination of a person to judge other cultures by the standards of their own culture, which can lead to misunderstanding and discrimination.

Gender Bias

The tendency to favor one gender over another, often resulting in unfair treatment based on an individual's gender or reinforcing stereotypical gender roles.