Recently, financial markets have become highly integrated. This development
A)allows investors to diversify their portfolios internationally.
B)allows minority investors to buy and sell stocks.
C)has increased the cost of capital for firms.
D)answers a and c are both correct.

Question

Quizplus · Accepted Answer

Financial market integration allows investors to diversify their portfolios internationally, thereby reducing the risks associated with having all their investments in one domestic market. It does not necessarily increase the cost of capital for firms. Choice B is incorrect as minority investors can buy and sell stocks even in less integrated markets.

Recently, Financial Markets Have Become Highly Integrated