The surprisingly low level of international assets in investment portfolios reflect investors' decisions to hold undiversified portfolios is known as the home-bias puzzle.

Question

Quizplus · Accepted Answer

This statement is true. The home-bias puzzle refers to the tendency of investors to be biased towards investing in domestic assets, resulting in a lower level of international assets in their investment portfolios. This goes against the principle of diversification, which suggests that investors should spread their investments across different countries and asset classes to minimize risk and maximize returns.

The Surprisingly Low Level of International Assets in Investment Portfolios