If the stock market of a foreign country is consistently up when the dollar value of the currency is down,

Question

Quizplus · Accepted Answer

When the stock market of a foreign country is consistently up while the dollar value of the currency is down, there may not be a great deal of exchange rate risk for a U.S.-based investor. This is because the gains in the foreign market may offset any losses related to the devaluation of the currency. However, it is still important for investors to diversify their portfolios to mitigate risks.

If the Stock Market of a Foreign Country Is Consistently