A cross analysis between three countries around the world were arranged to determine which of those countries present the best investment opportunities. An evaluation among the countries was structured through the comparison of interest rates, inflation, GDP, unemployment and exchange rate fluctuations. International portfolio theory is important for multinational corporations to make decisions about where and how they should invest in other countries. .
Current information that pertains to the project, like the country's indices, is easily located in websites like yahoo (http://finance.yahoo.com/m2?u). Information about the country's inflation and interest rate is often located in the country's national bank, such as; The Bank of Brazil, The Bank of Japan, and The Bank of United Kingdom. The GDP for each country was obtainable through a website known as Countrywatch. Countrywatch contained a lot of information about different factors regarding the different countries that are relevant to this project. Such factors included: history of the country, past and current economic conditions, development, etc. This information is helpful when analyzing a country's investment opportunity because it shows what types of risk may be involved.
To further understand the differences amongst the countries and to have a better understanding of the appropriate investment strategies, a regression analysis was created.
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Literature Review.
Brazil:.
For many years, Brazil suffered from very high inflation, until 1994, when the Brazilian government introduced the Real Plan. After the plan was introduced, the economy grew an average of 3.4% until 1998. In February of this year, the Sao Paulo Stock Market was the highest since June of 2000. "Investors abroad purchased nearly 7.48 billion reals in shares on the Sao Paulo trading floor, selling shares worth a total of 5.92 billion reals over the same period," (Countrywatch).