Adding foreign stocks to a portfolio
A) Is always a bad idea
B) Is always a good idea
C) Is a good idea if the returns on these stocks are weakly correlated with the returns on the rest of the portfolio
D) Is a good idea if the returns on these stocks are highly correlated with the returns on the rest of the portfolio

Question

Quizplus · Accepted Answer

Adding foreign stocks to a portfolio can be beneficial if their returns are weakly correlated with the returns on the rest of the portfolio. This can help in diversifying the portfolio, potentially reducing risk and improving the overall return.

Adding Foreign Stocks to a Portfolio