Q.

Which of the following is true regarding the capital market development since the 1970s?

A. The extent of intertemporal trade was larger than theory predicts.
B. Onshore-offshore interest rate differentials were too large.
C. The extent of the international portfolio diversification was smaller than theory predicts.
D. The role of emerging markets declined over time.
Answer» C. The extent of the international portfolio diversification was smaller than theory predicts.
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