Analysts at JP Morgan look at the data on various stock markets and find the following: The historical returns in local currency terms are $8\%,$ and $14\%$ on the US and Brazil$$s stock market while the volatility of returns in local currency terms in the US and Brazil has been $16\%$ and $15\%$ respectively. Brazilian Real is expected to depreciate roughly $7\%$ a year against the USD and volatility of Real$/$$ currency return is $5\%.$ JP Morgan is constructing portfolios for US clients. Which of the analysts do you agree with?

Group of answer choices

Analyst concludes that as Brazil$$s equity market have better returns and lower risk compared to the US equity markets for the US investor, and hence offer better Sharpe ratio to the US investor.

Another analyst points out that on dollar basis, Brazilian markets generate only $7\%$ returns and the has risk$/$volatility of $20\%.$

Third analysts disagree with both and says that though Brazil$$s equity generates $7\%$ returns on dollar basis, the volatility assessment is wrong. In particular, this analyst finds out that the correlation between stock and currency returns in Brazil is $0$ and hence risk in Brazil$$s equity returns in dollar terms is $15\mathrm{.}81\%$

Both A and C