Analyze the comparative levels of risk and return for the various areas of the world. Can the risk-return trade-off fully explain the magnitude of the differences in return for these various regions? As an investor, what would you see as the pros and cons of international investment?

  

Transcribed Image Text:

mcial Assets Figure 7.4 Historical Rates of Return in Global Markets: 1970-2011 This figure reports the ranges of annual returns for domestic and international composites, as well as the Europe and Pacific regional composites, over the period 1970 through 2011. Annual ranges of returns 125% 107.5% 100% 75% 79.8% 69,9% 50% 37.6% 25% 9.8% 9.6% 10.1% 9.3% Compound annual return 0% -25% -37.0% 36.2% 43.1% 46.1% -50% United States International Europe Pacific Legend: US stocks in thio erple on reprosontod by the Standad & FPoors boo ad wch group of securtes and consided to be portaefme US k are represerted by the Morgan Starioy Cap Eucpn oc by the Morgen ary Cp Staney Cacn errtore acic oK An SuImes toiMostnert.of income ndd dos n SourceO 20o12 MomrgM China and India are perhaps d mcial Assets Figure 7.4 Historical Rates of Return in Global Markets: 1970-2011 This figure reports the ranges of annual returns for domestic and international composites, as well as the Europe and Pacific regional composites, over the period 1970 through 2011. Annual ranges of returns 125% 107.5% 100% 75% 79.8% 69,9% 50% 37.6% 25% 9.8% 9.6% 10.1% 9.3% Compound annual return 0% -25% -37.0% 36.2% 43.1% 46.1% -50% United States International Europe Pacific Legend: US stocks in thio erple on reprosontod by the Standad & FPoors boo ad wch group of securtes and consided to be portaefme US k are represerted by the Morgan Starioy Cap Eucpn oc by the Morgen ary Cp Staney Cacn errtore acic oK An SuImes toiMostnert.of income ndd dos n SourceO 20o12 MomrgM China and India are perhaps d

Answer rating: 100% (QA)

i The returns for USA are less than only Europe but the deviation of returns are the least ii I... View the full answer