Question

Introducing small portions of international equities into a portfolio tends to:

a. increase risk significantly
b. increase return significantly
c. decrease risk moderately
d. decrease return moderately

Answer 1

Introducing small portions of international equities into a portfolio tends to increase return significantly. So, the correct answer is option a.

Step-by-step explanation:

Introducing small portions of international equities into a portfolio tends to increase return significantly.

By diversifying a portfolio with international equities, investors have the opportunity to potentially increase their returns because different stock markets around the world may perform differently at various times. This can help spread the risk and potentially increase overall returns.

So, the correct answer is option a.