Risks and Returns. Use this section to analyze the risks and returns of different investment instruments in the U.S. and non-U.S. markets you selected.
You may find it helpful to use online brokerage aids or other tools in conducting this analysis. Specifically, you should:
A. Investment Instruments. Review stock, bond, mutual fund, and commodities performance in the two markets. Be sure to:
1. Analyze investment returns in each of the two markets, including dividend yields, capital gains, prices relative to intrinsic values, and foreign exchange considerations associated with each of the instruments. Use relevant indicators and visual displays to help present your findings.
2. Explain what your analysis of returns suggests about each market’s performance and how that might affect decisions on where to list.
Justify your response.
3. Compare and contrast how the different types of instruments move in the two markets over time, explaining the significance of this information for decisions on where to list. Provide specific examples to support your answer. For example, have certain types of instruments historically performed better in one market over another? Have certain types of instruments yielded higher returns more quickly?
4. Assess the risks versus returns associated with the different types of investment instruments in the two markets. How might these trade offs affect listing decisions? Support your response with specific examples.
B. Interest and Inflation. Analyze how interest rates and inflation affect different investment instruments and investor decisions. Give specific examples from the two markets selected to support your answer. For example, how do inflation and interest rates affect stock, bond, and mutual fund returns in each market? How does that, in turn, affect business and individual short- and long-term investment planning?
C. Taxation. Would tax policies in the two markets make one a better option for IPO listing than the other? Why or why not? Give specific examples.
