The correct answer is      (D.)  New Zealand

It's true -- stocks in the small island nation yield an amazing 7.3% on average. Why do New Zealand's stocks yield so much? Partly because the country's tax laws create incentives for higher dividend payouts; partly because New Zealand's publicly traded companies want to attract foreign investors; and partly because of a quirk in New Zealand's law.

New Zealand withholds 15% of dividend income paid to most non-resident shareholders -- including those from the U.S. But many companies boost their payouts to foreign investors to make up for the withholding -- and the New Zealand government actually subsidizes them for doing so. Again, attracting foreign investors is a priority for this small, geographically remote country. Meanwhile, U.S. investors can still retrieve the 15% withheld by requesting a foreign tax credit. The result is a truly superior dividend yield for Americans investing in New Zealand's stocks.

And to add fuel to the fire, New Zealand's stock market has risen significantly over the past few years, driven by strong economic growth -- boosted by rising agricultural-commodity prices -- and an increase in foreign investment due to a sharp increase in the value of New Zealand's dollar. Heightened by their traditionally high dividend yields, Kiwi stocks delivered a total return of more than +120% between March 2003 and October 2007.

New Zealand is one of the world's most beautiful countries, full of rolling meadows, breathtaking mountain ranges and unspoiled shorelines that stretch from the tropics to the edge of the Antarctic region. And it's also a gorgeous source of investment opportunities, especially if you like high-yield securities. In the inaugural issue of StreetAuthority's High-Yield International newsletter, Editor Nick Lanyi details the make-up of the New Zealand market and shares his favorite Kiwi income stock -- one of the country's biggest companies, which carries a whopping 10.3% yield. In the same issue, Nick also offers an in-depth look at the nearby Australian market and profiles three Aussie stocks, including one with an astounding 13.0% yield. To learn the names of these stocks, and to learn more about the High-Yield International newsletter, please visit this link.