Cumulative Investing ProjectThis 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 will monitor the performance of the portfolio during the course. In Unit VIII, 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 again in Unit VIII; and
- change analysis, which will identify the primary reason for the change in stock price. (This column will be updated again in Unit VIII.)
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 to the current date.In a separate Word document, choose one of the companies in your portfolio to analyze further, and respond to the prompts below.
- How could the company you have chosen from your portfolio hedge its transaction, economic, and translation exposure? Explain each possible method in detail. What are the possible limitations of each method?
- What possible motive might the company have had for direct foreign investment, and how did they benefit from international diversification?
- What are the specific political and financial risks for your chosen company? Explain some methods of reducing exposure to country risk, while maintaining business as usual in that country.
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.
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