problem 1: Describe the diversification principle in the context of foreign investment in relation to the domestic investment?
problem 2: Describe different factors determining return on securities in different countries.
problem 3: How do you compute the rate of return on foreign bond? Assume that ‘d’ represents domestic market and ‘f’ foreign market and rd = 10%, rf = 8%. Further suppose that foreign currency appreciates by 2% and corporate income tax rate ry = 25% and the capital gains tax T = 12% in both the countries, then recognize the market for investment.
problem 4: Describe the factors influencing risk measurement in the international investment?
problem 5: What do you know by proficient portfolio in international financial management? Describe mathematical interpretation of the concept.
problem 6: How can you compute required rate of return on the international investment in integrated and segmented capital markets.
problem 7: Describe the Capital Asset Pricing Model (CAPM) in two country perspective.