Reference no: EM132509424

Betashares is spruiking a new portfolio that focuses on international diversification. In general terms, which of the following is most accurate about the risk-return tradeoff from international diversification?

Select one:

a. International diversification provides a better risk-return trade-off because countries' economic cycles are not perfectly correlated

b. For an Australian investor, international diversification provides a better risk-return trade-off primarily because it provides access to industries that do not exist, or have no proxies, in the Australian market

c. None of these options is correct

d. In general, international diversification has higher risk per return because of its exposure to international political risk

e. International diversification provides a better risk-return trade-off mainly because there are so many additional securities to invest in overseas, enabling you to reduce firm-specific risk