Home bias refers to the tendency of investors to invest a disproportionate amount of their portfolios in domestic securities, despite the risks and opportunities available in international markets. This results in an overweighting of investments in the home country, potentially leading to missed opportunities for diversification and risk reduction.

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Home Bias Refers to

Question 44

Multiple Choice

Home bias refers to

A) the tendency to vacation in your home country instead of traveling abroad.
B) the tendency to believe that your home country is better than other countries.
C) the tendency to give preferential treatment to people from your home country.
D) the tendency to overweight investments in your home country.
E) none of the above.

Correct Answer: