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International Investments, Inc. Student Coaching Slides

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Title: International Investments, Inc. Student Coaching Slides

1
International Investments, Inc.Student Coaching
Slides
2
Concepts Covered
• Global nature of business and economics
• Macroeconomics
• - Introduction to macroeconomic variables
• - Interest rates market of loanable funds
• - Money inflation

3
Concepts Covered
• Statistics
• - Descriptive statistics
• - Hypothesis testing
• - Regression analysis
• - Variation uncertainty

4
Questions 1,2, and 3Doing Statistics on Excel
• If you wish to review doing statistics on Excel,
read the Using Excel for Statistics PowerPoint on
the course web site. Use version appropriate for
Excel 2003 or Excel 2007.
• The Excel data file for International
Investments, Inc. is also on the course web site.

5
Question 1Hypothesis Tests
• Should you use a z, t, or p test? Look at the
data and the sample size.
• Hint No change is the null hypothesis.

6
Question 2Scatter Plot
• From scatter plot, is there a relationship
between changes in market indices and interest
rates?
• As changes in interest rates increases, do
changes in stock market indices appear to
increase or decrease?
• What country, if any, is an outlier ?

7
Question 2Regression Analysis
• R Square Coefficient of Determination percent
variation in change in market indices (Y)
accounted for by variation in change in interest
rates (X) small value does not mean
relationship is weak.
• Regression Coefficients - coefficient on
X-variable measures the slope of the trend Line.
(positive sign - positive relationship, negative
sign negative relationship)
• p-Value is used to indicate the level of
significance.

8
Question 3 Foreign Inflation Return for U.S.
Investor
• How will inflation in one country affect the
value of that currency relative to other
countries? (E. g. Will it take more or less yen
to buy a dollar?)
• How would the adjusting exchange rate affect the

9
Question 4 Macroeconomic Variables and Foreign
Investments?
• All economies go through business cycles, periods
of more and less rapid expansion or contraction
in productivity.
• Some macroeconomic variables tend to increase
earlier in the business cycle and are called