Multiple choice

International funds invest in various countries therefore they are low risk funds.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

International funds invest in securities across multiple countries, which actually introduces additional risks: currency risk (exchange rate fluctuations), country-specific political risks, regulatory differences, and information asymmetry (less familiarity with foreign markets). Diversification across countries can reduce some risks but does NOT make international funds low risk. Option B is correct because international funds are generally considered high-risk due to these added complexities and volatilities.

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