Impact of foreign exchange rate on stock returns - Dissertation Example

Only on StudentShare

Extract of sample
Impact of foreign exchange rate on stock returns

Table 1 reports the results of Augmented Dickey Fuller test of unit root for the stock indices and exchange rates of both the UK and Pakistan. The test has further been applied at different levels as well as in the first difference form. The findings will be reported in terms of each country starting with the UK first then Pakistan. Both the ADF and regression results will be presented for the country indices and then for each of the companies. This chapter is divided into several parts with the main parts comprising study findings for the UK (both ADF test and regression), study findings from Pakistan (ADF and regression), and finally the analysis section where these findings are discussed and analyzed. 5.2 Findings (UK) Augmented Dickey Fuller (ADF) Test Table 1 below presents ADF results for UK companies and GBP/USD rate. As is evident in the table, the results include the FTSE 100 index and ten major companies operating in the UK. Table 2 provides the findings of the ADF test for the national exchange rate (EX) of the GBP against the GBP. ...
Download paper

Summary

Dissertation, Finance and Accounting Impact of foreign exchange rate on stock returns Name: Course: Professor: Institution: City and State: Date: Chapter 5: findings and analysis 5.1 Introduction The ADF test was applied in this study to test the null hypotheses of unit root in each of the series…
Author : mcdermottbrigit

Related Essays

Economic Indicators' Impact on Different Stock Categories
While every indicator is an important measure of a facet of the economy, do all of them influence the stock markets equally? Hence the importance to know is which of these indicators influence the stock markets most, and probably more importantly which economic indicators most influence which types of stocks. For an investor, knowing which key economic affect the stock prices most can be of paramount importance, especially if they are in the stock market for the short-term. Different families of stocks provide different returns, which means that different investors, based on their appetite for...
25 pages (6275 words) Research Paper
Money Management: Exchange on Trade Fund (ETF), which is associated with the stock market
Money management is the process of being a custodian of one’s finances by knowing where today’s finances are being spent, and drawing a well thought out plan showing where one wants this money to go. Therefore, it calls for one to be well organized; have set goals, which would gear this investment to success; have a track of one’s spending by putting in place a realistic budget, and above all have a well thought-out savings strategy. The paper takes cognizance of the Exchange on Trade Fund (ETF), which is associated with the stock market. Carrel (2008) explains that ETF is an investment...
16 pages (4016 words) Assignment
Foreign Exchange Rates as Unbiased Estimate of Future Sport Rates
This knowledge will enable the formulation of trading strategies to enhance the effectiveness of market entry and exit, to properly time the purchase of currencies at the lows, and the sale at the highs, or to adopt an adequate hedging position. The study employed three methods of determining the existence of EMH with the intention of arriving at results that corroborate each other, since any one method taken alone can never be assuredly accurate. The first method employs the regression of future spot rates against forward exchange premiums. The second method tests for a confirmation of the...
26 pages (6526 words) Dissertation
Determination of Exchange Rate
The initial period was 1870 to 1914 where most countries adopted the gold standard where gold was used as domestic money. The above gold standard was a uniform exchange rate regime, though some countries constantly used silver while other countries gold inconvertible currencies (Ehrmann and Fratscher, 2004, p. 105). The start of the First World War interrupted this exchange rate era thereby bringing in the second phase that was 1914-1946. Under this second period, there were many changes as many countries saw great variations of currencies used among countries and the over time. Exchange...
16 pages (4016 words) Coursework
Aqua Resources To List On London Stock Exchange Research Project
In a quest to diversify its portfolio, Aqua resources limited made several investments in subsidiaries such as Aqua Resources (In-Pipe) Holdings Limited, Aqua Resources Asia Holdings Limited, an exempt company incorporated in the Cayman Islands formed in October 2008 and Cooperative Aqua Netherlands Holdings UA, a Dutch co-operative company formed on 22 March 2010. In the company’s short life at the London Stock Exchange, the most significant decision was the tender offer toJPMorgan Private Equity Limited where the company sold out its ordinary shares to 29.9%. This resulted in less than 25%...
25 pages (6275 words) Research Paper
Monetary Policy and the Stock Market: Empirical Evidence from Nigeria
The major findings include the impact of long run monetary policy on the stock market returns of Nigeria. The stock market returns get reduced because of high rate of Treasury Bill. This provides the evidence that efforts in monetary policy contributes in slowing down the economy. The returns in stock market witness a positive effect from current interest rate and interest rate lagged by one period. The sign of lagged error correction is negative. The feature of the variance decomposition results is that the sources of fluctuations of returns are largely due to shocks in stock market as well...
4 pages (1004 words) Research Proposal
Hedge and Exchange Rate Effects
The model publicities play a role in the features of the industry. For all stated nations, the affiliation amid the publicity and the commerce features is widely consistent with the economic hypothesis (Bodnar & William 29). Bodnar, Gordon and William claim that it was the contribution of leading financiers’ trade and affordability conferences and the Princeton Finance Seminars through helpful remarks. The provision of information on the direct financial speculation of Japan assisted in the recognition of the trends, developments and regressions made in the financial systems of the three...
8 pages (2008 words) Coursework
Got a tricky question? Receive an answer from students like you! Try us!