Looking at Figure 7-4 in your textbook, analyze the comparative levels of risk and return for the various areas of the world.

Can the risk-return tradeoff fully explain the magnitude of the differences in return for these various regions?

As an investor, what would you see as the pros and cons of international investment?

cial Assets Figure 7.4 Historical Rates of Return in Global Markets: 1970-2011 This figure reports the ranges of annual returns for domestic and international composites, as well as the Europe and Pacific regional composites, over the period 1970 through 2011. 125% Annual ranges of returns 100% 107.5% 75% 79.8% 69.9% 50% 37.6% 25% 9.816 9.656 10.1% 9.3% 096 Compound annual return -2553 -37.0% -43.1% -36.2%% -46,1%% -50% United States International Europe Pacific Legend: U.S. stocks in this example arn represented by the Standard & Poor's 500" group of securities and coreldored to be ruprosorta've of to US. . any rogusorted by the Morgan Buriby Captal Intomatora Europa European Blocka by the Morgan Stanley Capti intor Burley Coptel International Prote bruis. An ing Maven ronwarrant ol Income and door Source: 6 2012 Moring wu, Arights