Which one of the following will provide the greatest international diversification?
A)directly purchasing a foreign stock
B)purchasing stock of a U.S.multinational firm
C)purchasing an ADS
D)purchasing shares of an international mutual fund

Question

Quizplus · Accepted Answer

Purchasing shares of an international mutual fund will provide the greatest international diversification as it typically invests in a variety of stocks from various countries around the world. Directly purchasing a foreign stock or purchasing stock of a U.S. multinational firm may provide some international exposure, but it will not be as diversified as an international mutual fund. ADS (American Depository Shares) represent ownership in a foreign stock but is traded on a U.S. exchange, so it may not provide as much exposure to the foreign market as an international mutual fund.

Which One of the Following Will Provide the Greatest International