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Which of the Following Reasons Might Explain Why International Investing

Question 64

Multiple Choice

Which of the following reasons might explain why international investing might offer diversification benefits?


A) Companies operating in different countries will be affected differently by international events such as crop failures, energy prices, wars, tariffs, etc.
B) Since the introduction of the euro, European and U.S. markets have a tendency to move in the same direction on an annual basis
C) World markets are highly correlated to the U.S. market since the U.S. is the engine of economic growth around the world
D) U.S. companies operating in foreign countries automatically provide the investor with diversification against foreign currency fluctuations

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