Intermediate Microeconomics and Its Application 12th Edition by Walter Nicholson,Christopher Snyder

Exercise 17

Suppose that historical data showed that returns of Japanese stocks and returns on U.S. stocks tended to move in opposite directions. Would it be better to own only one country's stocks or to hold a mixture of the two? How would your answer change if the Japanese stock market always precisely mirrored the U.S. stock market?