As noted in the chapter from 1949 to 1990 the
As noted in the chapter, from 1949 to 1990, the Japanese market rose 25,000%.
a. Given these returns, does it make sense for Japanese investors to diversify internationally?
b. What arguments would you use to persuade a Japanese investor to invest overseas?
c. Why might Japanese (and other) investors still prefer to invest in domestic securities despite the potential gains from international diversification?

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