At the end of each month during the school term (or a date specified by your professor), you should evaluate the performance and behavior of your stocks.

a. Determine whether the performance of each of your foreign stocks is driven by the corresponding market where the firm is based. First, go to the site http://finance.yahoo.com/intlindices?u and look up the symbol for the country index of concern. For example, Brazil’s index is ^BVSP. Next, go to the site http://finance.yahoo.com/?u and insert the symbol for your stock. Click on Chart; at the bottom of the chart, insert the corresponding market index symbol (make sure you include the ^ if it is part of the index symbol) in the box. Then, click on Compare and assess the relationship between the market index movements and the stock’s price movements. Explain whether the stock’s price movements appear to be driven by the local market conditions. Repeat this exercise for each foreign stock in which you invested.

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b. Determine whether your foreign stock prices are highly correlated. Repeat the process described above, except insert the symbol representing one of the foreign stocks you own in the box below the chart.

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c. Determine whether your foreign stock’s performance is driven by the U.S. market (using the S&P 500 as a market proxy). Erase the symbol you typed into the box below the chart, and click on S&P just to the right.

Answer rating: 100% (QA)

a For each of the stocks the price movements appear to be driven ... View the full answer