cial Assets Figure 7.4 Historical Rates of Return in Global Markets: 1970-2011 This figure reports the ranges of annual returns for domestic and...

Looking at Figure 7-4 in your textbook, analyze the comparative levels of risk and return for the various areas of the world.

Can the risk-return tradeoff fully explain the magnitude of the differences in return for these various regions?

As an investor, what would you see as the pros and cons of international investment?

cial AssetsFigure 7.4Historical Rates of Return in Global Markets: 1970-2011This figure reports the ranges of annual returns for domestic and international composites, as wellas the Europe and Pacific regional composites, over the period 1970 through 2011.125%Annual ranges of returns100%107.5%75%79.8%69.9%50%37.6%25%9.8169.65610.1%9.3%096Compoundannual return-2553-37.0%-43.1%-36.2%%-46,1%%-50%United StatesInternationalEuropePacificLegend:U.S. stocks in this example arn represented by the Standard & Poor's 500"group of securities and coreldored to be ruprosorta've of to US. .any rogusorted by the Morgan Buriby Captal Intomatora EuropaEuropean Blocka by the Morgan Stanley Capti intorBurley Coptel International Prote bruis. An ingMaven ronwarrant ol Income and doorSource: 6 2012 Moring wu, Arights