Cumulative Investing Project
This cumulative investing project will help you to understand the factors, decisions, and ethics that influence the performance of multinational corporations (MNCs) and foreign stocks in the international financial environment.
Do you see any opportunity for international arbitrage with any of the companies’ exchange rates? Why, or why not?
Discuss interest rate and purchasing power parity as it pertains to each company.
What forecasting technique would you use to forecast the exchange rate, and how would you assess forecast performance?
What is the degree of each company’s transaction, economic, and translation exposure? What factors affect exposure in each currency? What desirable characteristics might limit exposure?
