In general, foreign-pay bonds provide ________ rates of return and ________ diversification effects for U.S.investors.
A)non-competitive; positive
B)competitive; positive
C)non-competitive; negative
D)competitive; negative

Question

Quizplus · Accepted Answer

Foreign-pay bonds often provide higher rates of return than domestic bonds due to currency exchange rates and differing interest rates in foreign countries. Additionally, investing in foreign-pay bonds can provide diversification benefits for U.S. investors by reducing the overall risk of their investment portfolio. Therefore, the correct choice is B, competitive rates of return and positive diversification effects for U.S. investors.

In General, Foreign-Pay Bonds Provide ________ Rates of Return and ________

In General, Foreign-Pay Bonds Provide Rates of Return and