Why is portfolio diversification so important in international trade?
What will be an ideal response?
Portfolio diversification is important in international trade because parties of the trade are better off by allowing themselves to reduce the risk of the return on their wealth. Traders can divide their wealth among wider amounts of assets in turn reducing the amount of money they have riding on each individual asset.
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Commercial airlines have two primary suppliers of large jet aircraft: Boeing and Airbus
Since millions of people fly with commercial airlines each year, should these aircraft manufacturers be required to incorporate every possible safety feature into the aircraft they manufacture? Should the manufacturers be allowed to incorporate no safety features? If some safety considerations are to be required, how would an economist decide on which features to include and which not to include?
Economic theory assumes people make decisions by weighing additions to cost against additions to benefit, which can best be described as
A) additivism. B) capitalism. C) marginalism. D) opportunism. E) rationalism.