2011 Mock - Question 48 where, please, somebody, reference, 2011

Dapper425

Can somebody please explain this answer - and where can I find a reference for this in Schweser or CFAI text.

Unforseen

This is pretty much word for word from the book on Emerging markets. Sorry.

thommo77

Okay - will have to glance through this again.

mik82

The answer key gives you a page reference.

NO EXCUSES

PalacioHill

I want to challenge choice C.

What about contagion? That is the result of the spread of crises, so it can happen.

Analti_Calte

The correct choice is B.

Contagion will happen in the local (emerging) region - correlation between emerging and developed markets will remain low and hence portfolio will be exposed to minimal risk.

nannan66

No, contagion occurs when crisis spread to other countries. Correlations increase in times of crisis. It's right from the CFAI book. Volume 4 Pg 402.

wake2000

Yes - but contagion will not necessarily spread to developed countries like UK/US - hence you can diversify the portfolio.

mcmc

in reading35
integration leads to price up return down
financing cost down