International Portfolio Choice and Corporation Finance: A Synthesis.

The article discusses aspects of international portfolio choice. In international portfolio models nations are defined as zones of common purchasing power units or as subsets of investors who use the same price index in deflating their anticipated monetary returns. Nations may further be separated by sovereignty of taxes and border controls, which constrain private financial transactions between countries. Analysts say nations can be meaningfully distinguished by Purchasing Power Parity deviations. It is reasonable to surmise that investors residing in different countries have different yardsticks for measuring real returns and risks.