In Some Respects, Internationally Diversified Portfolios Are the Same in Principle

question 50

Multiple Choice

In some respects, internationally diversified portfolios are the same in principle as a domestic portfolio because:

• A) the investor is attempting to combine assets that are perfectly correlated.
• B) investors are trying to reduce systematic risk.
• C) investors are trying to reduce the total risk of the portfolio.
• D) all of the above

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Definitions:

Postdecisional Dissonance

The psychological discomfort experienced after making a difficult choice, often leading to regret or rationalization of the decision.

Bad Decision

A choice that leads to negative or undesired outcomes, often resulting from inadequate information, poor judgement, or a lack of foresight.

Attractive Alternatives

Options that are appealing or desirable in comparison to others available, often considered in decision-making processes.

Weighing Facts

The process of assessing the importance, relevance, or truth of information or evidence before making a decision or judgment.