Explain the reasons to include foreign companies in the portfolio.

Question

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Answer 1

Question

Chapter 10, Problem 1Q

To determine

Explain the reasons to include foreign companies in the portfolio.

Expert Solution & Answer

Explanation of Solution

Foreign Portfolio Investment:

Investors include foreign portfolio investment to reduce portfolio risk. One can reduce portfolio risks by diversifying it internationally.

The capital markets enable substantial room for risk diversification by providing a high degree of independence. Many investment firms have introduced various international and country specific mutual funds. Individual investors can diversify their personal portfolios by investing in these funds without incurring the costs of investing in foreign stocks directly.

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Answer 2

Question

Chapter 10, Problem 1Q

To determine

Explain the reasons to include foreign companies in the portfolio.

Expert Solution & Answer

Explanation of Solution

Foreign Portfolio Investment:

Investors include foreign portfolio investment to reduce portfolio risk. One can reduce portfolio risks by diversifying it internationally.

The capital markets enable substantial room for risk diversification by providing a high degree of independence. Many investment firms have introduced various international and country specific mutual funds. Individual investors can diversify their personal portfolios by investing in these funds without incurring the costs of investing in foreign stocks directly.

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Answer 3

Question

Chapter 10, Problem 1Q

To determine

Explain the reasons to include foreign companies in the portfolio.

Expert Solution & Answer

Explanation of Solution

Foreign Portfolio Investment:

Investors include foreign portfolio investment to reduce portfolio risk. One can reduce portfolio risks by diversifying it internationally.

The capital markets enable substantial room for risk diversification by providing a high degree of independence. Many investment firms have introduced various international and country specific mutual funds. Individual investors can diversify their personal portfolios by investing in these funds without incurring the costs of investing in foreign stocks directly.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 10, Problem 1Q

To determine

Explain the reasons to include foreign companies in the portfolio.

Expert Solution & Answer

Explanation of Solution

Foreign Portfolio Investment:

Investors include foreign portfolio investment to reduce portfolio risk. One can reduce portfolio risks by diversifying it internationally.

The capital markets enable substantial room for risk diversification by providing a high degree of independence. Many investment firms have introduced various international and country specific mutual funds. Individual investors can diversify their personal portfolios by investing in these funds without incurring the costs of investing in foreign stocks directly.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 10, Problem 1Q

To determine

Explain the reasons to include foreign companies in the portfolio.

Expert Solution & Answer

Explanation of Solution

Foreign Portfolio Investment:

Investors include foreign portfolio investment to reduce portfolio risk. One can reduce portfolio risks by diversifying it internationally.

The capital markets enable substantial room for risk diversification by providing a high degree of independence. Many investment firms have introduced various international and country specific mutual funds. Individual investors can diversify their personal portfolios by investing in these funds without incurring the costs of investing in foreign stocks directly.

Answer 6

Chapter 10, Problem 1Q

To determine

Explain the reasons to include foreign companies in the portfolio.

Expert Solution & Answer

Explanation of Solution

Foreign Portfolio Investment:

Investors include foreign portfolio investment to reduce portfolio risk. One can reduce portfolio risks by diversifying it internationally.

The capital markets enable substantial room for risk diversification by providing a high degree of independence. Many investment firms have introduced various international and country specific mutual funds. Individual investors can diversify their personal portfolios by investing in these funds without incurring the costs of investing in foreign stocks directly.

Answer 7

Chapter 10, Problem 1Q

To determine

Explain the reasons to include foreign companies in the portfolio.

Answer 8

Expert Solution & Answer

Explanation of Solution

Foreign Portfolio Investment:

Investors include foreign portfolio investment to reduce portfolio risk. One can reduce portfolio risks by diversifying it internationally.

The capital markets enable substantial room for risk diversification by providing a high degree of independence. Many investment firms have introduced various international and country specific mutual funds. Individual investors can diversify their personal portfolios by investing in these funds without incurring the costs of investing in foreign stocks directly.