Empirical studies find that financial market liberalizations tend to ______.
A) increase local firms' cost of capital
B) increase the correlation of emerging market returns with world market returns
C) increase the volatility of emerging market returns
D) More than one of the above
E) None of the above

Question

Quizplus · Accepted Answer

Financial market liberalizations often lead to increased integration with global markets, which can result in higher correlations between emerging market returns and world market returns.

Empirical Studies Find That Financial Market Liberalizations Tend to ______