Investors and firms who diversify their U.S. portfolios by buying foreign stocks or investing in foreign subsidiaries take on a much higher level of portfolio risk than if they had invested in domestic stocks or companies only.

Question

Quizplus · Accepted Answer

Diversifying internationally can actually reduce portfolio risk because it spreads investments across different economies and markets, which often do not move in tandem. This can lower overall volatility compared to investing solely in domestic stocks or companies.

Investors and Firms Who Diversify Their U