Returns (relative to risk)from internationally diversified portfolios tend to be superior to those yielded by purely domestic ones.

Question

Quizplus · Accepted Answer

International diversification helps to reduce risk by spreading investments across different countries and regions, which can lead to higher returns relative to the risk taken. Domestic portfolios are restricted to a single country's economic and political conditions, and may suffer from the risk of concentration in certain industries or sectors.

Returns (Relative to Risk)from Internationally Diversified Portfolios Tend to Be