Innocents Abroad: Currencies and International Stock Returns

HBS Publishing Case No.: 9-204-141; Teaching Note No.: 5-206-012

Posted: 31 Oct 2005

See all articles by Mihir A. Desai

Mihir A. Desai

Harvard Business School - Finance Unit; National Bureau of Economic Research (NBER)

Date Written: November 15, 2004

Abstract

SUBJECT AREAS: Currency, Foreign exchange, International finance, Investment management, Money, Stocks

CASE SETTINGS: Global; Financial services; 8 employees; 2004

What do international stocks contribute to the portfolio of a U.S. investor? How do currencies interact with stock price movements in determining the benefits of international diversification? This case helps students compare the risks and returns of foreign stock markets with each other and with the U.S. market and to examine the risks and returns of international diversification. Students must calculate returns, adjust for currencies, derive correlations, and map efficient frontiers based on raw data.

Note: Teaching Note available. To obtain executable spreadsheets (courseware), please contact our customer service department at custserv@hbsp.harvard.edu.

Suggested Citation

Desai, Mihir A., Innocents Abroad: Currencies and International Stock Returns (November 15, 2004). Available at SSRN: https://ssrn.com/abstract=839189

Mihir A. Desai (Contact Author)

Harvard Business School - Finance Unit ( email )

Boston, MA 02163
United States
617-495-6693 (Phone)
617-496-6592 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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