Home bias refers to the tendency of investors to overweight their investment portfolio with assets from their home country. This is often done despite evidence suggesting that diversification across many countries can lead to reduced overall risk and improved returns.

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Home Bias Refers to

Question 39

Multiple Choice

Home bias refers to

A) the tendency to vacation in your home country instead of traveling abroad.
B) the tendency to believe that your home country is better than other countries.
C) the tendency to give preferential treatment to people from your home country.
D) the tendency to overweight investments in your home country.

Correct Answer: