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The following table shows return and volatility of portfolios in different countries. They are all in US dollars. The risk-free rate of return is 3%.
- The following table shows return and volatility of portfolios in different countries. They are all in US dollars. The risk-free rate of return is 3%. Which index should a US investor include in his/her portfolio?
Country | Return % | Standard Deviation % | Correlation with US Index |
USA | 15 | 20 | 1 |
Brazil | 17 | 30 | 0.7 |
China | 14 | 30 | 0.75 |
Russia | 16 | 36 | 0.4 |
UK | 10 | 24 | 0.8 |
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