Homework: International Finance- Cumulative Investing Project
Instructions
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.
You will continue to work with the stock portfolio that you created, consisting of at least three U.S. based MNCs and two foreign stocks. You will monitor the performance of the portfolio. You will attempt to explain why each stock increased or decreased in price and why your portfolio performed well or poorly. Your explanations should offer insight into what is driving the valuations of the companies.
Continue to use the spreadsheet you created to track your investment.
The spreadsheet consists of the following data points:
i. firm name;
ii. ticker symbol;
iii. amount of investment in each stock ($10,000 per stock for a total of $50,000);
iv. price per share at which you purchased the stock;
v. exchange rate;
vi. percentage change in stock price, which will be updated again in Unit VIII; and
vii. change analysis, which will identify the primary reason for the change in stock price.
Update the spreadsheet columns with the percentage change in the stock price since your last homework submission (at an interval of your choosing) and the primary reason for the change in the stock price to the current date.
In a separate Word document, choose one of the companies in your portfolio to analyze further, and respond to the prompts below.
i. How could the company you have chosen from your portfolio hedge its transaction, economic, and translation exposure? Explain each possible method in detail. What are the possible limitations of each method?
ii. What possible motive might the company have had for direct foreign investment, and how did they benefit from international diversification?
iii. What are the specific political and financial risks for your chosen company? Explain some methods of reducing exposure to country risk, while maintaining business as usual in that country.
Format your homework according to the following formatting requirements:
i) The answer should be typed, using Times New Roman font (size 12), double spaced, with one-inch margins on all sides.
ii) The response also includes a cover page containing the title of the homework, the student's name, the course title, and the date. The cover page is not included in the required page length.
iii) Also include a reference page. The Citations and references must follow APA format. The reference page is not included in the required page length.