Q. Which of the following is true regarding the capital market development since the 1970s? (Solved)
1. The extent of intertemporal trade was larger than theory predicts.
2. Onshore-offshore interest rate differentials were too large.
3. The extent of the international portfolio diversification was smaller than theory predicts.
4. The role of emerging markets declined over time.
- c. The extent of the international portfolio diversification was smaller than theory predicts.