The correct answer is      (A.)  Israel

With its vast media coverage and recent Beijing Olympics, the world's eyes have long focused on China. But China isn't the only game in town when it comes to outstanding international investing opportunities. Take the Tel Aviv 100 Index: it has gained +127.8% in the past five years. That's six times better than the U.S. S&P 500 index, which reluctantly eked out a gain of just +25.7% during the same period.  And, as a bonus for growth investors, the index has an average dividend yield of 3.2% -- more than twice what China has to offer and more than 30% higher than the average yields on the S&P.

Israel's market has been more resilient than China's market lately - thanks in part to its lower earnings multiples and higher dividend yields. Its currency has also been stronger than the yuan relative to the dollar, which magnifies returns for U.S. investors.

While Israel can't match China's rapid +9% expansion, Israel's economic growth, expected at an average +4.4% through 2012, is still robust. Israel exports $50.2 billion worth of goods and services a year, enough to give the country a $5 billion current-account surplus. Corporate tax rates are substantially lower than the United States and are scheduled to decline further in 2010. And though political struggle and ethnic strife tend to dominate the headlines, lawmakers there agree on an economic policy centered on restrained government spending and foreign investment.

The bottom line is that Israeli companies pay higher yields because they want to attract capital. And the country has hundreds of opportunities for U.S. investors. So which companies are the best bets for earning double-digit yields while capturing substantial long-term capital gains?

In a recent issue of her High-Yield Investing newsletter, editor Carla Pasternak identified one of her favorite Israeli companies -- which pays an 11.9% dividend yield and expects earnings to grow +20% next year. Carla always has a steady stream of double-digit income investment ideas. To find out more about this Israeli company and to learn more about the High-Yield Investing newsletter, please visit this link.