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LOS i: Distinguish between global investing and international diversification and discuss the growing importance of global industry factors as a determinant of risk and performance.
Q1. Which of the following best describes the relationship between international diversification and global investing? Global investing diversifies across:
A) countries. It underperforms international diversification.
B) countries and industries. It outperforms international diversification.
C) countries. It outperforms international diversification.
Q2. An investor considers two mutual funds. Mutual Fund A invests in companies around the world, investing in those firms expected to experience superior returns. Mutual Fund B passively invests in companies throughout the world and maintains an exposure to all major industry sectors. Which Mutual Fund will have the lowest amount of unsystematic risk and why?
A) A, diversifying across borders reduces unsystematic risk.
B) B, industry factors have become more important for stock returns.
C) B, passive investing ensures low unsystematic risk.
Q3. Global investing refers to diversifying across:
A) countries.
B) industries and countries.
C) industries.
Q4. Global investing is recommended over international diversification because:
A) country factors are not as important for stock returns as they once were.
B) corporations are pursuing conglomerate diversification.
C) governments impose restrictions on the repatriation of capital. | 
发表于 2009-3-5 16:59
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