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 ADR
D) purchasing shares of an international mutual fund

Question

Quizplus · Accepted Answer

Purchasing shares of an international mutual fund offers the greatest international diversification because it allows investors to invest in a wide range of foreign stocks across different countries and sectors, spreading out the risk more effectively than investing in a single foreign stock, a U.S. multinational firm, or an ADR, which represent more concentrated investments.

Which One of the Following Will Provide the Greatest International