Investors in segmented markets will bear a lower level of risk by holding a disproportionately large share of their investments in their local market as opposed to the level of risk if they invested in a globally diversified portfolio.

Question

Quizplus · Accepted Answer

Investors in segmented markets who concentrate their investments in their local market rather than diversifying globally are generally exposed to a higher level of risk due to the lack of diversification benefits that come from spreading investments across various global markets.

Investors in Segmented Markets Will Bear a Lower Level of Risk