Author Question: Why is portfolio diversification so important in international trade? What will be an ideal ... (Read 66 times)

geoffrey

  • Hero Member
  • *****
  • Posts: 880
Why is portfolio diversification so important in international trade?
 
  What will be an ideal response?

Question 2

What can one learn from Figure 13-3 from the text, shown below?
 
  What will be an ideal response?



kxciann

  • Sr. Member
  • ****
  • Posts: 356
Answer to Question 1

Portfolio diversification is important in international trade because parties of the trade are better off by allowing themselves to reduce the risk of the return on their wealth. Traders can divide their wealth among wider amounts of assets in turn reducing the amount of money they have riding on each individual asset.

Answer to Question 2

This figure shows that since the 1980s, United States foreign assets and liabilities have both increased rapidly. However, liabilities have risen faster than assets, resulting in a substantial net foreign debt.



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
 

Did you know?

Cucumber slices relieve headaches by tightening blood vessels, reducing blood flow to the area, and relieving pressure.

Did you know?

Everyone has one nostril that is larger than the other.

Did you know?

There are 20 feet of blood vessels in each square inch of human skin.

Did you know?

Allergies play a major part in the health of children. The most prevalent childhood allergies are milk, egg, soy, wheat, peanuts, tree nuts, and seafood.

Did you know?

Though “Krazy Glue” or “Super Glue” has the ability to seal small wounds, it is not recommended for this purpose since it contains many substances that should not enter the body through the skin, and may be harmful.

For a complete list of videos, visit our video library