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Which of the Following Statements Is True of International Diversification

Question 56

Multiple Choice

Which of the following statements is true of international diversification?


A) International diversification is more beneficial to an investor because he/she can trade at any time of the day.
B) Greater diversification benefits arise from holding a portfolio of shares in companies from countries with stable governments,rather than from emerging countries with greater political risk.
C) Holding a portfolio of shares traded on foreign exchanges increases the likelihood that the correlation between the shares is lower because of the larger number of assets that an investor can choose from.
D) Greater diversification benefits arise from holding a portfolio of shares in companies from countries with stable governments,rather than from emerging countries with greater political risk and holding a portfolio of shares traded on foreign exchanges increases the likelihood that the correlation between the shares is lower because of the larger number of assets that an investor can choose from.

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