Understand international diversification and currency risk: test your skills
Companies outside the US make up a large part of the world’s stock market. Owning some spreads country risk. Answer each question to see the explanation; your score appears at the end.
This test checks that you can
- Explain why investors add international stocks
- Name currency and political risks
- Check existing international exposure
- Practice
1. International stocks add which extra risk?
- Practice
2. A total world fund holds…
- Practice
3. Before adding international funds you should…
- Key idea
4. Which statement best explains "One country is a concentration"?
- Key idea
5. Which statement best explains "Currency cuts both ways"?
- Key idea
6. Which statement best explains "You may already own some"?
- Action plan
7. In the action plan, which step comes first?
- Mistake to avoid
8. Which of these is a mistake this lesson warns against?
- Mistake to avoid
9. Which of these is a mistake this lesson warns against?
Portfolio $30,000: $21,000 US, $9,000 international. What share is international?
Show the answer
30%
$9,000 ÷ $30,000 = 0.3.
Estimate the international share of your investments using each fund’s fact sheet.
More tests in this bootcamp
- See how compound interest builds over time
- Understand index funds, diversification and fees
- What is an ETF? Understand the basket behind a share
- Compare ETFs and mutual funds without the jargon
- Understand the S&P 500 and what it leaves out
- Explore total market funds and check the overlap
- Understand international diversification and currency risk
- Look beyond the story of a sector or thematic fund
- Understand a three-fund portfolio and rebalancing
- Learn dollar-cost averaging: a schedule instead of market timing
- Final exam: Funds and portfolios