Global Integration and Asset Allocation

Very Easy Asset Allocation Global Integration

As an investment advisor, you are assessing a client's portfolio strategy to improve their overall asset allocation by incorporating global investments. The client is particularly interested in understanding how global integration can enhance the diversification of their portfolio and reduce risk.

Which of the following statements best describes the impact of global integration on asset allocation?

Global integration has no effect on portfolio diversification.

Global integration can enhance portfolio diversification by providing access to a wider range of investments in different markets.

Global integration only increases risk without any potential for diversification benefits.

Hint

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