When individual investors become aware of overseas investment opportunities and are willing to diversify their portfolios internationally,
A. they trade one market imperfection, information asymmetry, for another, exchange rate risk.
B. they benefit from an expanded opportunity set.
C. They should not bother to read or to understand the prospectus, since its probably written in a foreign language
D. They should invest only in dollars or euros.
Answer:B
When individual investors become aware of overseas investment opportunities and are willing to diversify their portfolios internationally,
A. they trade one market imperfection, information asymmetry, for another, exchange rate risk. B. they benefit from an expanded opportunity set. C. They should not bother to read or to understand the prospectus, since its probably written in a foreign language D. They should invest only in dollars or euros.