Which of the following characterizes international investor behaviour?

Question

Quizplus · Accepted Answer

Research has shown that investors tend to exhibit a home bias in their portfolio holdings, meaning they hold a disproportionately large percentage of assets in their home country. This can be attributed to familiarity or preference for local companies, cultural bias, and regulatory barriers to international investments. Therefore, option C characterizes international investor behavior accurately. Options A, B, and D are not accurate as international investors may not be fully diversified, may not hold optimal portfolios, but rather exhibit a home bias in their asset allocation choices. Furthermore, some international investors do invest in international stocks.

Which of the Following Characterizes International Investor Behaviour