5. The graph below shows the percentage that domestic investors keep in domestic equities in their investment portfolios across different countries. As a reference, the graph also shows the weight that the equities of each of these countries have in the global Morgan Stanley All Country World Index, reflecting the different sizes of the equities markets of the different countries. What does the graph tell you about international portfolio di- versification? How do you explain the general pattern? The countries with the lowest percentages of domestic investors holdings in domestic equities are EU countries. Which reasons could explain this different behavior? 80% 70% 60% 50% 40% 30% 20% 10% 0% Equity market diversification across countries US Australia Canada Japan MU AUT JY Euro France Germany Portugal zone Global Index Weight (MSCI All country World Index) as of December 2021 Domestic investors holdings in domestic equities

5. The graph below shows the percentage that domestic investors keep in domestic equities in their investment portfolios across different countries. As a reference, the graph also shows the weight that the equities of each of these countries have in the global Morgan Stanley All Country World Index, reflecting the different sizes of the equities markets of the different countries. What does the graph tell you about international portfolio diversification? How do you explain the general pattern? The countries with the lowest percentages of domestic investors holdings in domestic equities are EU countries. Which reasons could explain this different behavior? Global Index Weight (MSCI All country World Index) as of December 2021 Domestic investors holdings in domestic equities