This supplement to appendix D in your textbook is meant to clarify the project instructions and modify some questions. This should be used in conjunction with appendix D. It is best to keep the weekly data in a spreadsheet program, such as Microsoft Excel, and then export the tables to a word processing program, such as Microsoft Word, to complete the project and answer the questions. As I use Microsoft Office, your project submission must be in a format that I can open. Please submit your project through the assignment labeled project on Blackboard. Ensure your project file(s) will open properly, contain any formulas intact, and do not send a link to your project on a cloud service. Project instructions clarification Appendix D instructs you to go to biz.yahoo.com/i or biz.yahoo.com/p to find U.S.-based multinational firms. This method does not work well, so follow the steps listed below. Pick a company If a firm is not immediately forthcoming, browse the front page of finance.yahoo.com, www.bloomberg.com, or your favorite financial news website for ideas. Determine if the firm conducts international business Method 1 A firms investor relations website 1. Go to Google and search for the term company name investor relations. Follow this link and locate either the companys 10-Q (quarterly) or 10-K (annual) financial statements. 2. Open the most recent 10-Q or 10-K (usually a PDF document) and locate the Consolidated Statements of Comprehensive Income/(Loss), which is in the section titled Financial Statements and Supplementary Data. You can navigate there via the Table of Contents. Alternatively, you can use the search function of the program you are using to view the financial statements to search for the term translation, although there most likely will be several search results that you will have to sort through. 3. If the firm has a line item on the statement of comprehensive income/(loss) titled foreign currency translation adjustment, or something similar, then that firm is explicitly multinational, and you may use that firm for this project. Method 2 The SECs Edgar database 1. Go to the SECs Edgar database https://www.sec.gov/edgar/searchedgar/companysearch.html. 2. Enter your company name in the search box. Searching by ticker will most likely return fewer search results. 3. Your company may have more than one search result, so you will have to sort through them to find the correct one, as firms may have subsidiaries, trusts, etc. that also come up under the firm name. Usually, the line with an SIC number is for the main company. 4. Follow the link and look for the 10-K or 10-Q under the filings column. 5. Follow steps 2 & 3 from Method 1. Special note: your U.S. based firms may accept digital currencies (bitcoin, Ethereum, etc.). For only one of your two U.S. firms, you may use a digital currency as your foreign currency. Appendix D instructs you to go to www.adr.com to locate foreign firms that trade on U.S. exchanges. Select two firms that are in different countries. The procedure is outlined below. 1. Go to www.adr.com. 2. Scroll down to the investors section and click on Search DRs. 3. Scroll down to the search criteria. 4. Select NYSE, NASDAQ, and/or NASDAQ CM under Exchange. 5. You can further refine your search by region, country, or sector, if you wish. 6. Choose a firm, noting under Security Information its ticker, home country (country of domicile), and home currency. The appendix then instructs you to select firms based in countries with stock indices listed on finance.yahoo.com/intlindices. Use the following link instead: https://finance.yahoo.com/worldindices. Alternatively, go to finance.yahoo.com, hover your cursor over Markets, and select World Indices. If you do not recognize any indices, click on an index link or search for the index name in Google to determine in which country the index is based. Make sure your foreign stocks home exchanges have indices you can locate on Yahoo! and note the index tickers. Gather data weekly for your U.S. firms, ADRs, S&P 500, and foreign indices from the adjusted closing price on the historical data link on Yahoo! Finance. The S&P 500 ticker is ^GSPC. Gather data weekly on exchange rates from www.oanda.com (see Appendix D in the text and also below). Modifications to, and clarification of, the evaluation questions Question 1a. Evaluate stock performance weekly on Saturday to ensure markets in different time zones are closed. April 27th, 2019 should be the last Saturday you gather data. Examples of news events that could drive stock prices are Brexit, trade wars, etc. Question 1b. Your portfolio performance and the events that drive performance will be the primary discussion point for your presentation. As an exercise in investing and portfolio design, I will rank the portfolios of each group based on total portfolio return over the semester. You will not be graded on your portfolio performance, so do not worry if the stocks you pick lose value. What we are concerned with is why your stocks performed as they did. Question 2: Calculate the following correlation coefficients: U.S. stock 1/S&P 500 U.S. stock 1/foreign currency to which U.S. firm 1 is exposed U.S. stock 2/S&P 500 U.S. stock 2/foreign currency to which U.S. firm 2 is exposed ADR 1/relevant home index ADR 1/S&P 500 ADR 1/relevant exchange rate ADR 2/relevant home index ADR 2/S&P 500 ADR 2/relevant exchange rate This is in addition to questions 2 5. You should have a column for each stock, index, and currency data series. You do not have to manually calculate the correlation and may use a function in your spreadsheet program, if one is available, to do this. In Microsoft Excel, use the CORREL function to calculate the correlation coefficients. The appendix instructs you to go to www.oanda.com for exchange rate data. The Oanda link for historical exchange rates is found at the bottom of the page. Pay special attention to whether you are viewing direct or indirect exchange rates! You cannot download data from Oanda for free, so youll have to manually enter the exchange rates each week. After you select your foreign currency, select weekly frequency and the mid-price (the middle of the bid-ask spread). Hover your mouse over the graph, and it will tell you the exchange rate for that date in the Currency I want box. Record the exchange rates in an Excel column for each currency. Note also that Oanda reports for weeks ending Sunday. Align each exchange rate with the appropriate week. Your spreadsheet should have columns for the following: Date/Week number, U.S. firm adjusted closing prices, U.S. firm percentage changes, ADR adjusted closing prices, ADR percentage changes, S&P 500 and ADR home index closing levels, S&P 500 and ADR home index percentage changes, relevant exchange rates, and the percentage changes in the relevant exchange rates. Your first observations should be for the week before the start of the semester so you can calculate the first weeks percentage changes. You can call this week 0. Finally, calculate the standard deviation and arithmetic average return to your U.S. stocks, ADRs, and an equally-weighted portfolio. An equally-weighted portfolio of 2 U.S. stocks and 2 ADRs will have .25 as each stocks weight. Use the STDEV.S() and AVERAGE() functions in Excel to calculate the standard deviations and averages, respectively.

I am just looking for two foreigns companies, never mind about the US ones, just Foreigns.