Author Question: Why is portfolio diversification so important in international trade? What will be an ideal ... (Read 76 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?

The people with the highest levels of LDL are Mexican American males and non-Hispanic black females.

Did you know?

There are approximately 3 million unintended pregnancies in the United States each year.

Did you know?

Drug-induced pharmacodynamic effects manifested in older adults include drug-induced renal toxicity, which can be a major factor when these adults are experiencing other kidney problems.

Did you know?

In 1864, the first barbiturate (barbituric acid) was synthesized.

Did you know?

Approximately 15–25% of recognized pregnancies end in miscarriage. However, many miscarriages often occur before a woman even knows she is pregnant.

For a complete list of videos, visit our video library