Cumulative Investing Project
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.
In this unit, you will continue to work with the stock portfolio that you created in Unit II, consisting of at least three U.S.-based MNCs and two foreign stocks. You have monitored the performance of the portfolio during the course. In this unit, 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.
For this unit, continue to use the spreadsheet you created in Unit II to track your investment. The Unit II spreadsheet consists of the following data points:
- firm name;
- ticker symbol;
- amount of investment in each stock ($10,000 per stock for a total of $50,000);
- price per share at which you purchased the stock;
- exchange rate;
- percentage change in stock price, which will be updated for a final time in this unit; and
- change analysis, which will identify the primary reason for the change in stock price. (This will be updated for the final time in this unit.)
Update the spreadsheet columns with the percentage change in the stock price since your last assignment submission (at an interval of your choosing) and the primary reason for the change in the stock price up to the current date.
In a separate Word document, respond to the prompts below.
- Discuss any differences between the capital structures of the firms based in the United States versus those of the foreign companies in your portfolio.
- Do any of the companies in your portfolio have bonds issued in a currency different from their home country? Explain the risks involved with this practice.
- How are the companies you have chosen for your portfolio affected by trade-related finance services?
- Why might the MNCs in your portfolio consider short-term financing from their subsidiaries?
- How did your portfolio perform over time? Why do you think your portfolio value increased or decreased during the time you were invested in the stocks? Was it because of the markets where your firms do business or because of firm-specific conditions? Explain in detail.
Submit your spreadsheet and summary. Your summary should be at least two pages in length. Adhere to APA Style when constructing this assignment, and include in-text citations and references for all sources that are used. Please note that no abstract is needed. For your summary, use a minimum of two sources, one of which may be the textbook. Your summary should include a title page, introduction, body, conclusion, and references page.