NO.PZ202209060200004506
问题如下：
Which of the suggestions Stone outlines for Palma in selecting the proposed investments is most likely correct? The one regarding:
选项：
A. local currency investment is most likely correct.
B. spread advantage is most likely correct.
C. the credit cycle is most likely correct.
解释：
SolutionB is correct. Investments in securities denominated in a foreign currency can often produce higher yields than domestic investments produce, particularly in emerging market countries. However, if the portfolio manager chooses to hedge the foreign exchange (FX) exposure, the cost of hedging can offset a significant amount of the yield advantage, thus reducing the relative value advantage. This may not be the case for currencies that are pegged because the portfolio manager may choose not to hedge the FX because the foreign currency will most likely be more stable, assuming there is no devaluation.
A is incorrect because investments in countries where the currency is pegged may not require FX hedging, given more stability in the exchange rate.
C is incorrect because credit cycles may vary across regions and this can be used to the advantage of the portfolio manager to diversify.
題目背景如圖，不太明白和EU負利率這個背景有什麼關系