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In 1999, the United States wasexperiencing a fairly strong economic recovery, ahead of othernations. Fears of an overheating economy led to sudden inflationaryfears for the next few years.3 - Would you expect U.S. interestrates to rise or drop?4 - Would you expect thedollar to depreciate or appreciate?5 - Would you expect a foreign bondportfolio to be a good investment compared to a U.S. dollarportfolio under this scenario?6 - Is currency risk a barrier tointernational investing? Please explain.7 - Should nominal interest rates beequal across countries? Why or why not?8 - Explain how total portfolio riskcan be decomposed in various risk exposures and indicate why riskdecomposition can be a complex exercise.9 - List and explain a couple offactors that introduce potential biases in performance and riskmeasurement of portfolios.10 - What factors would influence aU.S. business firm to go overseas?