value of diversification Introduction Every finance students have learnt diversification is to reduce total risk by investing a basket of assets in portfolios. But what contributes to the success of portfolio diversification? A large number of assets? A variety types of asset allocation? Adding international investment? Numerous of risk factors? They are all indicators of a well-diversified portfolio. In this case, we will discuss about the advantages and disadvantages of diversification in portfolio
continue to investigate the relative international diversification benefits of ADRs. However, the empirical findings are inconclusive. For example, ussing weekly data of 113 ADRs from 8 countries (Australia, France, Japan, Netherlands, South Africa, Spain, Sweden and UK) during the period of January 1980 to September 1994, Jiang (1998) find that US portfolio with investment in ADR portfolios achieves better risk-adjusted returns than that containing foreign market index portfolios. Differing from Jiang
The value of diversification Introduction Diversification is worth more than a word. It works on reducing the total risk of a portfolio with different asset types. But what contributes to the success of portfolio diversification? A large size of portfolio? A variety types of asset allocation? Adding international investment? Numerous of risk factors? They are all indicators of a well-diversified portfolio. But it is hard to achieve a perfectly diversified portfolio in reality because you cannot diversify
Running head: INTERNATIONAL PORTFOLIO DIVERSIFICATION International Portfolio Diversification International Portfolio Diversification Globalization resulted, among other things, in a noticeable increase in foreign trade and investment worldwide. For individuals, the main type foreign investment is foreign portfolio investment (or foreign indirect investment) which is “the investment by individuals, firms, or public bodies (e.g., governments or nonprofit organizations) in foreign financial
YUNNAN BAIYAO: PRODUCT / MARKET DIVERSIFICATION Yunnan Baiyao Group Co., Ltd. is part of the pharmaceutical industry known for its unique traditional herbal medicines specializing in the treatment of open wounds, fractures, contusions and strains. The business has undergone changes in the recent years to modernize not only the structure of the company but also with the aim to diversify its market and products in order to remain competitive at a global level. The long history of Yunnan Baiyao’s
INTERNATIONAL BUSINESS STRATEGY OF PARENT COMPANY When a firm decides to go international with their business they must face many competitive decisions. Two of the most important decisions a company will face are the pressures for cost reduction and pressures for local responsiveness. The pressure of cost reduction forces a firm to lower their value of the cost of creation. Firms can outsource to places where costs of their products are much cheaper or they can mass-produce a standardized product
Solutions Inc (PS2), founded in 2004 in Canada, is a young environmental management & consulting company who licensed a patent of unique TPS technology for PCB contaminated soil treatment and oil sludge recovery, having a vision of fully integrated International environmental service company. The firm's competencies, weaknesses, external opportunities and external threats are identified in below summary table. Strength High entry barrier due to strict licensing, high start up cost, requirement of special
Geographic diversification is a necessity for any financial institution interested in growing and expanding. As financial institutions grow geographically, numerous issues may arise. Before any expansion planning can be done, financial institution managers must make a determination on the type of geographic expansion that best fits the financial institution and its goals. Making the correct decision to further expand operations domestically or internationally is imperative to ensure success of
different areas of the world; however, it has shown a rather steady and rapid progress in the recent times and has become an international dynamic which, due to technological advancements, has increased in speed and scale, so that countries in all five continents have been affected and engaged. What Is Globalization? Globalization is defined as a process which, based on international strategies, aims to expand business operations on a worldwide level and was precipitated by the facilitation of global
Global versus Regional Geographic Diversification Recent progresses in the international business literature note down that multinational enterprises (MNEs) have a tendency to be more regional than global, in terms of width and strength of their market covering, and that the majority of their international action is conduct within their home regions. In agreement with the regionalization theory, this suggest that the responsibility of intra-regional expansion is much lower than the responsibility