Investments, tenth edition

 International 

Diversification 

P

AR

T VII

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bod61671_ch25_882-925.indd   882

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  C H A P T E R  

2 5

  International Diversification  

883

     25.1 

Global Markets for Equities 

  

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 FTSE Index Co. [the sponsor of the British FTSE (Financial Times Share Exchange) stock market index] uses 

14 specific criteria to divide countries into “developed” and “emerging” lists. Our list of developed countries 

includes all 25 countries that appear on FTSE’s list. 

 

 

You can easily invest today in capital markets of nearly 100 countries and obtain 

up-to-date data about your investments in each of them. By 2011, 52 countries had stock 

markets with aggregate market capitalization above $1 billion. The data and discussion in 

this chapter are based on these countries. 

 The investments industry commonly distinguishes between “developed” and “emerg-

ing” markets. A typical emerging economy still is undergoing industrialization, is growing 

faster than developed economies, and has capital markets that usually entail greater risk. 

We use the FTSE  

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   criteria, which emphasize capital market conditions, to classify markets 

as emerging or developed.