American Investors Have Several Alternatives Available to Diversify Their Portfolios

question 45

Multiple Choice

American investors have several alternatives available to diversify their portfolios internationally.In terms of transaction costs, which of the alternatives below is least attractive?

• A)mutual funds with an international focus
• B)stocks of U.S.based companies with extensive foreign sales and/or operations
• C)direct investment in foreign stocks
• D)American Depositary Shares

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Definitions:

Self-efficacy

An individual's belief in their own capability to successfully complete tasks or achieve goals.

Feelings of Inferiority

An individual's persistent sense of inadequacy or lack of self-worth compared to others, which can influence motivation and behavior.

Alfred Adler

An Austrian medical doctor and psychotherapist who founded the school of individual psychology and emphasized the importance of feelings of inferiority in the development of personality.

Archetypes

Primordial, universal symbols and motifs in the collective unconscious, identified by Carl Jung, that shape human understanding and behavior.