Advantages of Global Integration in Asset Allocation

Very Easy Asset Allocation Global Integration

As part of her portfolio management strategy, Sarah is considering the value of global integration in her asset allocation decisions.

She understands that investing globally allows her to diversify her portfolio and reduce specific risks associated with local markets. However, she also recognizes potential challenges, such as currency risk and political instability.

Which of the following statements best reflects a key advantage of global integration in asset allocation?

Global integration eliminates all currency risks associated with international investments.

Global integration provides the opportunity to invest in a wider array of asset classes and geographical markets, enhancing diversification.

Global integration guarantees higher returns on investments regardless of market conditions.

Hint

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