Archive for 'Biases'
Local vs. Foreign Returns and Home Bias
An important conceptual issue to keep in mind is that the CAPM suggests that investors hold the (value-weighted) market portfolio. This portfolio should considers all investable assets, domestic and foreign. Consequently, investors should invest not just in the U.S. market, but also in all foreign markets. Of course, even if the CAPM does not hold, [...]
Posted: October 10th, 2009 under Biases.
Tags: assets, currency rate, dividedn, investment rate
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