Suppose you are a US (Dollar) based investor and your financial advisor has calculated the optimum...
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Suppose you are a US (Dollar) based investor and your financial advisor has calculated the optimum portfolio weights using historic data and the optimisation proposed by H. Markowitz. The financial advisor suggest that you should invest 10% in the US, 75% into Europe and 15% into Asian equities. Discuss briefly whether you should diversify internationally and whether you should follow the advice regarding the optimum weights. Suppose you are a US (Dollar) based investor and your financial advisor has calculated the optimum portfolio weights using historic data and the optimisation proposed by H. Markowitz. The financial advisor suggest that you should invest 10% in the US, 75% into Europe and 15% into Asian equities. Discuss briefly whether you should diversify internationally and whether you should follow the advice regarding the optimum weights.
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Diversifying internationally can be beneficial for several reasons It allows investors to reduce their exposure to countryspecific risks and take adva... View the full answer
Related Book For
Microeconomics An Intuitive Approach with Calculus
ISBN: 978-0538453257
1st edition
Authors: Thomas Nechyba
Posted Date:
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