Home bias in the context of finance and investing refers to the phenomenon where investors have a preference for domestic over foreign investments, leading them to allocate a larger portion of their portfolio to securities from their home country. This can be due to familiarity, perceived lower risk, or patriotic reasons, among others.

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Home Bias Refers to

Question 32

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 options are correct.

Correct Answer: