How does home bias impact financing diversification and the cost of capital for investors?

Question 16 options:

Home bias often leads to increased financing diversification as investors prioritize international assets over domestic ones.

Home bias may result in a higher cost of capital for investors, as it limits exposure to global opportunities and diversification benefits.

Home bias tends to increase financing diversification by encouraging investors to allocate their investments across various domestic sectors.

Home bias decreases the cost of capital as it promotes a concentrated investment approach, reducing exposure to international market risks.

Home bias has no impact on financing diversification or the cost of capital, as it is primarily related to individual investor preferences.