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Optimum portfolio combines investments – Please write a paper about optimizing investments in a portfolio. Global...

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Finance

Optimum portfolio combines investments – Please write a paper aboutoptimizing investments in a portfolio. Global investing needs to beincluded. Many foreign stock and bond investments provide superiorrates of return compared with U.S. securities. They have lowcorrelations with U.S. stock and bond portfolios (Chapter 3).Discuss how the inclusion of foreign securities in a portfolio willhelp to reduce the overall risk of the portfolio and, in fact, mayincrease the rate of return to the portfolio.

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Foreign portfolio investments provide investors with international diversification of portfolio assets which in turn helps achieve a higher riskadjusted return The global stock market operates in such a way that the factors that drive one market for a particular geography at any given time are different from those that prevail in other    See Answer
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Optimum portfolio combines investments – Please write a paper aboutoptimizing investments in a portfolio. Global investing needs to beincluded. Many foreign stock and bond investments provide superiorrates of return compared with U.S. securities. They have lowcorrelations with U.S. stock and bond portfolios (Chapter 3).Discuss how the inclusion of foreign securities in a portfolio willhelp to reduce the overall risk of the portfolio and, in fact, mayincrease the rate of return to the portfolio.

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