Question

Investors that include international stocks in their portfolios expect to receive (i) ______ returns relative to...

Investors that include international stocks in their portfolios expect to receive (i) ______ returns relative to the same amount of total risk since (ii) _______.

Choices for (i) a. Higher b. Lower c.

Please finish the sentence (ii):

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

ANSWER DOWN BELOW. FEEL FREE TO ASK ANY DOUBTS. THUMBS UP PLEASE.

Investors that include international stocks in their portfolios expect to receive "Higher" returns relative to the same amount of total risk since (ii) International DIVERSIFICATION.

Explanation:

International diversification is an effective way of reduction of risk.

There is a diversification benefit by exposing to different markets. The portfolio return is not dependent on a single economy companies for its survival.

The Unsystematic risk is reduced due to exposure to many stocks.

Results:

Same Return, Less Risk.

Or

Higher Return, Same Risk.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Why do many investors hold portfolios of numerous investments? Group of answer choices to maximize returns...
Why do many investors hold portfolios of numerous investments? Group of answer choices to maximize returns to capture voting rights across many different corporations to receive higher dividend payouts diversification benefits to maximize risk
Investors require _____ returns on riskier securities.Consequently, a high-risk security will have a _____ value than...
Investors require _____ returns on riskier securities.Consequently, a high-risk security will have a _____ value than a low-risk security even if both securities have the same expected cash flows. A) lower; lower B) lower; higher C) higher; higher D) higher; lower Bonds that sell at a price below their par value are called _____ bonds. The larger the investor’s required rate of return relative to the coupon rate, the _____ the discount of a bond with a particular par value.  ...
15. According to our class discussion of empirical findings in stock markets, which of the following...
15. According to our class discussion of empirical findings in stock markets, which of the following statements is (are) correct? (I) Poorly- or well-performing stocks tend to continue abnormal performance over short horizons. (II) Portfolios of high P/E stocks exhibit higher risk-adjusted returns. (III) Larger firms tend to have higher stock returns than smaller firms. (IV) Value stocks usually generate lower returns than growth stocks. (V) Stock prices of firms with negative earnings surprise tend to rise. (a) I only...
If financial markets are semi-strong form efficient, all investors can effectivley select stocks for their portfolio...
If financial markets are semi-strong form efficient, all investors can effectivley select stocks for their portfolio by throwing darts at the Wall Street Journal stock page. Any stock selected by dart throwing will be just as good an investment as stocks in a professionally-developed portfolio. a. This is false because if you pick stocks via darts, investors may not up with a desirable risk-return combination. b. This is false because professionals can guarantee higher portfolio performance given the same level...
Problem 8-13 Consider the following information for three stocks, Stocks A, B, and C. The returns...
Problem 8-13 Consider the following information for three stocks, Stocks A, B, and C. The returns on the three stocks are positively correlated, but they are not perfectly correlated. (That is, each of the correlation coefficients is between 0 and 1.) Stock Expected Return Standard Deviation Beta A 9.05 % 14 % 0.7 B 11.22 14 1.2 C 12.96 14 1.6 Fund P has one-third of its funds invested in each of the three stocks. The risk-free rate is 6%,...
Stocks A and B have the following probability distributions of expected future returns: Probability A B...
Stocks A and B have the following probability distributions of expected future returns: Probability A B 0.2 (5%) (23%), 0.3 6 0, 0.2 11 24, 0.2 20 27, 0.1 35 50 A. Calculate the expected rate of return, , for Stock B ( = 10.50%.) Do not round intermediate calculations. Round your answer to two decimal places. % B. Calculate the standard deviation of expected returns, σA, for Stock A (σB = 22.46%.) Do not round intermediate calculations. Round your...
Expected returns Stocks A and B have the following probability distributions of expected future returns: Probability...
Expected returns Stocks A and B have the following probability distributions of expected future returns: Probability A B 0.1 -12% -33% 0.3 6 0 0.3 16 20 0.2 23 26 0.1 36 40 A. Calculate the expected rate of return, rB, for Stock B (rA = 13.60%.) Do not round intermediate calculations. Round your answer to two decimal places. _______ % B. Calculate the standard deviation of expected returns, ?A, for Stock A (?B = 19.56%.) Do not round intermediate...
Stocks A and B have the following probability distributions of expected future returns: Probability     A     B...
Stocks A and B have the following probability distributions of expected future returns: Probability     A     B 0.1 (15 %) (37 %) 0.1 4 0 0.5 14 23 0.2 19 27 0.1 39 37 Calculate the expected rate of return, , for Stock B ( = 13.60%.) Do not round intermediate calculations. Round your answer to two decimal places.   % Calculate the standard deviation of expected returns, σA, for Stock A (σB = 19.96%.) Do not round intermediate calculations. Round your...
Stocks A and B have the following probability distributions of expected future returns: Probability A B...
Stocks A and B have the following probability distributions of expected future returns: Probability A B 0.4 (7%) (35%) 0.2 2 0 0.1 11 18 0.1 24 30 0.2 35 44 Calculate the expected rate of return, , for Stock B ( = 8.10%.) Do not round intermediate calculations. Round your answer to two decimal places. % Calculate the standard deviation of expected returns, σA, for Stock A (σB = 31.61%.) Do not round intermediate calculations. Round your answer to...
Stocks A and B have the following probability distributions of expected future returns: Probability A B...
Stocks A and B have the following probability distributions of expected future returns: Probability A B 0.4 (11%) (28%) 0.2 3 0 0.1 15 23 0.1 23 26 0.2 36 45 Calculate the expected rate of return, , for Stock B ( = 7.20%.) Do not round intermediate calculations. Round your answer to two decimal places.   % Calculate the standard deviation of expected returns, σA, for Stock A (σB = 28.84%.) Do not round intermediate calculations. Round your answer to...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT