quickie cap mkts quiz...

Which of the following would indicate that a country is less affected by global events? The country is: A) small and has an undiversified economy. B) large and has a diversified economy. C) small and has a diversified economy.

I would say B… but most likely i am way off

tricky tricky one banni ----- C i chose undiversified initially thinking that if the country is so, it doesn’t care about what happens in other industries in other economies. then i thought maybe being diversified allows it to absorb downturns better.

B I would think it would depend on the context. What is CFAI’s answer?

Answer is B. Give me 2 min to finish this quiz and I’ll tell you the reason.

B - because the country is larger so the diversification is more spread out.

^ yep. large and diversified, so it’s better spread out.

man second guessing myself is going to kill me… when i first read the question I said B for sure, then I thought about it and was only about 40% sure that was it

B. The dog wags the tail.

i feel dumb now…

don’t feel dumb. i sat in front of this q for a while second guessing myself. these sort of easy but yet tricky q’s to me are what the CFAI are all about. right now we’re practicing. you’ll hit it on game day. right now, practice. the un-allen iverson approach.