12 Questions
What type of market is characterized by having signs of development but cannot be considered an emerging market?
Frontier market
What is the risk of making a financial loss as a result of exchange rate movements?
Currency risk
Which of the following is a risk of investing in foreign countries?
Foreign investment risk
Which type of market is generally defined as a country with well-developed capital markets and economy?
Developed market
What type of risk occurs when changes to the political climate in a country directly or indirectly impact inflation and interest rates?
Political risk
Which type of market is generally considered to be riskier than developed markets?
Emerging markets
What is the primary goal of international diversification?
To reduce volatility by spreading risk across multiple geographical regions
What is a benefit of adding foreign exposure to a portfolio?
To reduce exposure to country-specific risks
Why is diversification important for a portfolio?
To hedge and reduce risks associated with investing
What is a result of not diversifying a portfolio?
It will carry unnecessary risk
What is a reason why different types of investments perform differently at the same time?
They are affected differently by world events and changes in economic factors
What does diversification enable you to do?
To build a portfolio with generally less risk than the combined risks of the individual securities
Learn about international diversification, a risk management technique that reduces volatility by spreading investments across multiple geographical regions. Discover how it can help reduce portfolio risk and increase returns over the long-term.
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