Author Question: Why is portfolio diversification so important in international trade? What will be an ideal ... (Read 35 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?

In the United States, there is a birth every 8 seconds, according to the U.S. Census Bureau's Population Clock.

Did you know?

Serum cholesterol testing in adults is recommended every 1 to 5 years. People with diabetes and a family history of high cholesterol should be tested even more frequently.

Did you know?

When blood is exposed to air, it clots. Heparin allows the blood to come in direct contact with air without clotting.

Did you know?

People often find it difficult to accept the idea that bacteria can be beneficial and improve health. Lactic acid bacteria are good, and when eaten, these bacteria improve health and increase longevity. These bacteria included in foods such as yogurt.

Did you know?

The most common treatment options for addiction include psychotherapy, support groups, and individual counseling.

For a complete list of videos, visit our video library