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Global Market Investment

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a. Why should investors consider investing overseas?

b. What are the potential advantages, and perils?

c. What is Market Efficiency? What are the implications of Market Efficiency, for the pricing of securities and investing corporations' money?

d. Why is psychology important in a global setting?

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This solution explains Global Market Investment. The sources used are also included in the solution.

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Step 1:
Investors should consider investing overseas to achieve greater diversification. This means lower risk for the entire portfolio. Another reason for investing abroad is that there are more opportunities for higher returns available abroad. To improve returns on investment, the investor may invest abroad. Also the investor may take advantage of the favorable foreign exchange rate when investing abroad. For example, several investors invested in Yuan bonds because the value of Yuan was expected to increase compared to the US dollar.

Step 2:
The potential advantages of investing abroad are that the investor gets a choice of thousands of good companies. He can select the ones whose ...

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