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3/21/2026 21:31


If I mix a Foreign-Currency Bond in a portfolio of US Bond positions, ceteris paribus, what is the risk-consequence of resultant portfolio?

a : Porfolio gets more volatile due to fluctuations in foreign currency exchange rates
b : Portfolio gets more volatile due to greater fluctuations in interest rates in foreign bond markets vs. US bond market
c : Portfolio becomes less volatile due to Low correlations amongst world's bond markets
d : Portfolio becomes less volatile because of High correlations amongst world's bond markets.

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