A U.S investor should consider constructing global investment portfolios because

A. Overseas markets usually outperform U.S. markets.

B. Overseas markets are less risky.

C. Overseas markets offer risk reduction via diversification.

D. Investors will benefit from a stronger dollar

Asset allocation is defined as the process of deciding how to allocate an investors wealth among

A. Asset classes, sectors, and countries.

B. Asset classes, sectors and derivatives.

C. Asset classes, sectors and real estate

D. Asset classes

An individual in the consolidation phase of the investment life cycle would

A. Have enough income to cover expenses and excess assets would be used to benefit charities and family.

B. Be past the midpoint of their careers and have excess earnings that can be invested in moderately risky investments.

C. Be in the early to middle stage of their career, have a small net worth and long investment time horizon.

D. Have retired and would seek to preserve the real value of their investments.

An indirect investment occurs when an investor

A. Buys shares of stocks, bonds or mutual funds

B. Buys shares of stocks or options and futures.

C. Buys shares of stocks or bonds.

D. Deposits funds in a bank or buys mutual funds

An investor should expect to receive higher returns from taking on lower risks

A. True

B. False

The coefficient of variation is the expected return divided by the standard deviation of the return.

A. True

B. False