a. Why is international diversification attractive to an investor who already has a well diversified domestic portfolio?
b. The Committee is considering two international funds. The funds are Compak, Canadian Small Cap fund, and ACME Emerging Market Growth fund. A fellow committee member voiced her opinion that the Canadian securities would not be particularly effective risk-reducing investments and will favor inclusion of ACME Emerging Market fund to the plan. Is she correct? Discuss the logic behind her opinion.