Question: Evaluate and describe the essential elements contributing to the risk return trade-off for the internationally diversified bond portfolio for the context summarised in Exhibit 2.12.

Evaluate and describe the essential elements contributing to the risk return trade-off for the internationally diversified bond portfolio for the context summarised in Exhibit 2.12. Exhibit 2.12: Risk return trade-off for international bond portfolios

Exhibit 2.12: Risk return trade-off for international bond portfolios

Exhibit 2.12 Risk-Return Trade-off for International Bond Portfolios 11.00 - 10.00 - 100% Foreign 10% U.S. 90% Foreign 9.00 - Rate of Return Percent per Year 70% U.S. 30% Foreign 8.00 - 7.00 100% U.S. 6.00 - 7.00 8.00 9.00 10.00 11.00 12.00 13.00 Risk (or ) Percent per Year

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