Which of the following statements are correct about investing in emerging markets: Statement 1: Local currency appreciation against the dollar has been a frequent occurrence for U.S. investors in emerging markets. U.S. investors have consistently seen large percentages of their returns erased by currency appreciation. This is true even for long term investors. Statement 2: Historically the additional of emerging stocks to a U.S. equity portfolio has increased volatility. Volatility has also been increased when emerging markets are added to an international portfolio. Statement 3: Although correlations among emerging markets can change over the short term, such correlations show evidence of stability over the long term. Thus, an emerging markets portfolio that lies on the efficient frontier in one periods tend to remain close to the frontier in subsequent periods. a. Statement 1 and 2 b. Statement 2 C. Statement 1 and 3 d. Statement 2 and 3 e. All of the above
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