The Home-Bias Puzzle Could Be Used to Describe

question 51

Multiple Choice

The home-bias puzzle could be used to describe:

• A) The gains investors earn when over investing in foreign markets.
• B) The lack of international diversification in the United States.
• C) The increased preference for high variance investments in the domestic market.
• D) The surprisingly low level of domestic investment in the United States.

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Definitions:

Confidence Interval

An array of values, produced from sample statistics, that has the potential to include the value of an undetermined population characteristic.

Sample Size

The number of individuals or observations included in a statistical sample.

Standard Deviation

A gauge for the extent of fluctuation or divergence in a group of numbers.

Margin of Error

The amount of error that can be tolerated, often expressed as a percentage that indicates the range within which the true value is expected to lie with a certain level of confidence.