The economies of the world tend to rise and fall in cycles that offset each other. International stocks can provide possible diversification for a portfolio heavy on U.S. equities. Because research on foreign companies is usually difficult for individual investors to track on their own, a foreign equity mutual fund offers the investor the expertise of a global fund manager.
            Foreign-stock funds provide exposure to overseas markets at varying levels of risk. Economic and currency risk can swing in a positive or negative direction.

        Hence, diversification is the key to managing risk. Funds that invest overseas fall into four basic categories: global, international, emerging-market, and country-specific. The wider the reach of the fund, the less risky it is likely to be.

a.  Go to http://finance.yahoo.com. Click on the “Investing” tab and then click on “Mutual Funds.” On the left, under “Education” click on “Types of Mutual Funds.” In the middle of the page, click on “Foreign Stock Funds Explained.”
b.  Briefly explain the differences between the following funds:
    (1) Global fund
    (2) International fund
    (3) Emerging-market fund
    (4) Country-specific fund