Security returns

Security returns are found to be less correlated across various countries rather than within the country. Explain Why?

E

Expert

Verified

Security returns are less correlated since countries are different from each other related with the macroeconomic policies, industry structure, resource endowments, and have non-synchronous business cycles. Securities from same country are subjected to the same business cycle and macroeconomic policies, hence resulting in the high correlations among their returns.

   Related Questions in Financial Accounting

©TutorsGlobe All rights reserved 2022-2023.