A large part of the historical returns that a U.S. investor could have earned by investing in foreign stocks during the 1970 - 2005 period was due to

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The depreciation of the U.S. dollar relative to other currencies would have benefitted a U.S. investor who invested in foreign stocks during the 1970 - 2005 period, as the returns earned in foreign currencies would have been worth more in U.S. dollars due to the exchange rate. The other options are not as significant factors in explaining the historical returns of foreign stocks during this period. The depreciation of the U.S. dollar relative to other currencies would have increased the value of foreign stocks in U.S. dollar terms, thus contributing to higher returns for U.S. investors. The other choices (A, B, and C) do not adequately explain the historical returns on foreign stocks during this period.

A Large Part of the Historical Returns That a U