Reference no: EM133291056

Question: Select ONE (1) stock of U.S.-based MNCs that conduct a substantial amount of international business. Next, select ONE (1) foreign stock that are traded on U.S. stock exchanges.

Requirements:

Students required to conduct extensive reading from reliable sources.

Critically analyze whether the performance of U.S.-based MNCs is driven by the U.S. market. Then, assess the relationship between the U.S. market index movements and the stock's price movements.

Go to the site finance.yahoo.com/?u and search for your stock. Under "Chart", click on "Comparison" and select S&P (which represents the S&P 500 Index). If you want to review a list of possible stocks, go to biz.yahoo.com/p (which lists stocks by sectors or industries).

Critically interpret whether the foreign stock's price movements appear to be driven by local market conditions based on specified country market index. Then, assess the relationship between the market index movements and the stock's price movements.

Critically analyze whether your foreign stock's performance is driven by the U.S. market (using the S&P 500 as a market proxy).

Review annual reports and news about your chosen U.S.-based MNCs to determine where it does most of its business and the foreign currency to which it is most exposed. Critically evaluate whether your U.S.-based MNC's stock performance is influenced by the exchange rate movements of the foreign currency (against the U.S. dollar) to which it is most exposed.

Critically discuss whether the stock performance of your foreign firms is influenced by the exchange rate movements of the firm's local currency against the U.S. dollar. Provide your assessment of the relationship between the currency's exchange rate movements and the performance of the stock.