A relatively simple approach to diversification is to identify overseas projects that have performance levels that are highly correlated to domestic cash flows or project returns over time.
a. True
b. False

A. True

Explanation:

It involves a random selection of portfolio construction. The common man could make better returns by making a random diversification of investments be it local or overseas. It is the process of altering the mix ratio of different components of a portfolio.

A company may decide to diversify its activities by expanding into markets or products that are related to its current business even if its not located within.

answer; is usually (less than) the socially optimal level of consumption;