Why Is a Portfolio Including Both Domestic and Foreign Securities

question 12

Multiple Choice

Why is a portfolio including both domestic and foreign securities likely to have a higher average yield than one only containing domestic securities?

• A)Yields on foreign securities are more likely to be inversely related to yields on domestic securities.
• B)Yields on foreign securities are less likely to be inversely related to yields on domestic securities.
• C)Yields on foreign securities do not depend on economic conditions abroad,as do yields on domestic securities.
• D)A portfolio including both foreign and domestic securities is NOT likely to have a higher average yield than one containing only domestic securities.

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Definitions:

Horizontal Hypermobility

The frequent geographical movement or relocation of individuals, typically for work reasons, across similar levels of socioeconomic status.

Lateral Job-Changes

Movements or transfers to different positions at the same level of hierarchy within an organization, often to gain broader experience.

The Precariat

A social class formed by people suffering from precarity, which is a condition of existence without predictability or security, affecting material or psychological welfare.

Light Modernity

A term that is not commonly used in academic or popular discourse and might reflect a specific aspect or interpretation of modernity focusing on its less heavy or serious characteristics. NO.