0136091008_PPTsM17_Eiteman0136091008_12_MBF_C17课件.pptVIP

Chapter 17 International Portfolio Theory and Diversification International Diversification and Risk The case for international diversification of portfolios can be decomposed into two components, the first of which is the potential risk reduction benefits of holding international securities. This initial focus is on risk. The risk of a portfolio is measured by the ratio of the variance of a portfolio’s return relative to the variance of the market return (portfolio beta). As an investor increases the number of securities in a portfolio, the portfolio’s risk declines rapidly at first, then a