Question

Which of the following statements is incorrect regarding international diversification? Group of answer choices International diversification...

Which of the following statements is incorrect regarding international diversification?

Group of answer choices

International diversification across equities fails during market downturns.

International diversification leads to better improvements in the efficient frontier for investors in developing economies than for investors in developed economies.

International diversification across sectors or across markets provides similar improvement in the efficient frontier.

International diversification improves the efficient frontier for investors in both developed and developing economies.

International diversification should consider the type and weighting of industry sectors in each market.

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Answer #1

Option B is incorrect. This statement is incorrect - International diversification leads to better improvements in the efficient frontier for investors in developing economies than for investors in developed economies

All other options are correct. International diversification leads to better improvements in the efficient frontier for investors in both developed and developing economies. Thought investing in developed countries comes with less return but it also has less risk premium in relation to developing economies providing good diversification and thus help in improving efficient frontier

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