Holding foreign assets in a portfolio tends to reduce the portfolio risk.

Question

Quizplus · Accepted Answer

Holding a variety of assets in a portfolio, including foreign assets, can help to diversify the portfolio and reduce overall risk. This is because different countries and regions may experience different economic and market conditions, and investing in a range of assets can help to mitigate the impact of any individual market or economic event. However, it is important to note that investing in foreign assets can also introduce currency risk and other types of risk that may need to be managed.

Holding Foreign Assets in a Portfolio Tends to Reduce the Portfolio