Understanding Global Asset Allocation Strategies

Easy Asset Allocation Global Asset Allocation

A portfolio manager is responsible for determining the appropriate allocation of assets across various global markets. She is assessing the potential benefits of international diversification and needs to decide on an asset allocation strategy that optimizes risk and return while considering market correlations.

In this scenario, which of the following strategies should she consider when implementing global asset allocation?

Investing only in domestic assets to reduce currency risk.

Diversifying investments across multiple countries to enhance return potential.

Allocating all funds to fixed income securities regardless of geographic location.

Hint

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