1.State the factors that contribute to the segmentation of a countrys capital markets from the rest of the world. In your opinion, to what degree are currentlythe capital markets of the following countries segmented/integrated from the rest of the world?. Which ones of the factors that contribute to segmentation are most important in the case of the three countries above?

a) United Kingdom

b) Turkey

c) Greece

2. Do you think investors should try to diversify their domestic investment portfolios by including international assets in it? Why/why not? What is the best way to achieve the benefits (if any) of international portfolio diversification without bearing the associated costs?

3. Is foreign exchange risk systematic? What are the implications of your answer regarding corporate hedging policy with respect to foreign exchange risk? In your answers make sure to discuss the possibility of divergent views on this issue between management and shareholders.