By Using the Portfolio Theory in the Context of Risk

question 48

Essay

By using the Portfolio Theory in the context of Risk Diversification,provide an explanation for two-way international portfolio investment.

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Definitions:

Risk

Risk refers to the potential of losing some or all of an investment due to various factors such as economic changes, market volatility, or company performance.

Business Transaction

An economic event or activity that changes a company's financial position or earnings, often involving exchanges of value.

Gain

Gain refers to an increase in the value of an investment or asset, resulting in a financial profit when the asset is sold or valued.

Loss

A financial condition in which expenses exceed revenues, resulting in a negative balance.