An investor who wishes to achieve high returns and low risk exposure through international diversification would probably look for

Question

Quizplus · Accepted Answer

The investor should look for a compound rate of return higher than that in the United States and a negative or low positive correlation of returns with the United States market to achieve high returns and low risk exposure through international diversification. This ensures that the portfolio is not overly exposed to the US market and provides diversification benefits. Option B suggests stable currencies relative to the dollar, which is important but not the only factor to consider. Option C suggests a compound rate of return equal to that of the United States, which does not necessarily provide higher returns, and a correlation coefficient close to that of the United States, which does not provide sufficient diversification benefits. Option D is not a valid answer as it does not provide any guidance.

An Investor Who Wishes to Achieve High Returns and Low