Unlike the Theory of International Trade or the Theory of International

question 3

Multiple Choice

Unlike the theory of international trade or the theory of international portfolio investment,

• A)we do not have a well-developed, comprehensive theory of FDI.
• B)the comprehensive theory of FDI focuses on mean-variance efficiency.
• C)the comprehensive theory of FDI is an arbitrage argument, like interest rate parity.
• D)none of the above

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Definitions:

Confirmation Bias

The tendency to search for, interpret, and remember information in a way that confirms one's preconceptions.

Hypothesis

A proposed explanation made on the basis of limited evidence as a starting point for further investigation.

Contrary Evidence

Information or data that challenges, contradicts, or disproves a hypothesis, theory, or prevailing belief.

Recall

The act of retrieving information or events from the past in one's memory, often assessed in psychological tests and experiments.