What kind concept refers to the tendency for investors to over-weight their portfolio in investments in their home country and under-weight international investment?

A) Home bias
B) Asset allocation
C) Portfolio management
D) Hedge fund

Question

What kind concept refers to the tendency for investors to over-weight their portfolio in investments in their home country and under-weight international investment?

A) Home bias
B) Asset allocation
C) Portfolio management
D) Hedge fund

Quizplus · Accepted Answer

There is always conjecture as to selecting appropriate exposures between home country and overseas investments,but compared to theoretical models such as mean-variance benchmarks,tend to keep their money close to home.This bias strongly influences investment decisions even when greater diversification outside of domestic markets might yield greater profits and lessen risk.

What Kind Concept Refers to the Tendency for Investors to Over-Weight