The construction of an internationally diversified portfolio combines
A)currency and asset risk and return.
B)country risk with currency return.
C)credit risk with inflation risk.
D)asset risk with sovereign risk.

Question

Quizplus · Accepted Answer

The construction of an internationally diversified portfolio involves considering both currency risk and asset risk, as well as the potential returns for both. By diversifying internationally, investors aim to decrease the impact of currency risk while achieving better returns through exposure to multiple markets. Therefore, option A is the best choice. The other options (B, C, and D) either don't accurately reflect the factors involved in constructing an internationally diversified portfolio or are incomplete in scope.

The Construction of an Internationally Diversified Portfolio Combines