Errunza, Hogan, and Hung ["Can the Gains from International Diversification be Achieved Without Trading Abroad?" Journal of Finance, 1999] found that U.S. investors need to invest directly in foreign markets to fully achieve the benefits of international diversification.

Question

Quizplus · Accepted Answer

These authors found that U.S. investors can replicate the diversification benefits of foreign market returns with securities (MNCs, ADRs, and CECFs) already traded in the United States.