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Studies Show That International Stock Markets Tend to Move More

Question 1

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Studies show that international stock markets tend to move more closely together when the volatility is higher.This finding suggests that


A) investors should liquidate their portfolio holdings during turbulent periods.
B) since investors need risk diversification most precisely when markets are turbulent,there may be less benefit to international diversification for investors who liquidate their portfolio holdings during turbulent periods.
C) this kind of correlation is why international portfolio diversification is smart for today's investor.
D) none of the options

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