Choose wisely. There is only one correct answer to each question.
0%
Keep studying!
Review your answers below to learn more.
1.
International funds _______.
Can invest in value or growth stocks. Although most international funds fall in the foreign large-value and blend categories, today's international funds can invest in growth or value stocks from large or small companies.
2.
International funds are volatile because they prefer to hold small-cap stocks.
False. International funds do not, as a rule, prefer to hold small-cap stocks.
3.
International small-cap funds are generally _______.
More volatile than international large-cap funds. During some time periods, international small-cap funds may outperform international large-cap funds; during other periods, they'll underperform. But they tend to be more volatile in general.
4.
Suppose you buy shares of a British stock. The stock falls 5%, but Britain's currency gains 10% against the dollar. You've hedged your currency back into U.S. dollars. You have _______.
Lost money. Because you've hedged your currency exposure, it doesn't matter what the pound does; your returns are affected only by the stock's performance--and in this case, that means you've lost money.
5.
Suppose you buy shares of a British stock. The stock falls 5%, but Britain's currency gains 10% against the dollar. As an unhedged U.S. investor, you _______.
Made money. While you've lost money on the stock, you made a profit on the pound's rise against the dollar.
