1. Innocents Abroad: Currencies and International Stock Returns Critique
Alvaro Fernandez
Yizhen Liu
Daniel Mejia
Yitian Xue

2. Agenda Benefits of International Asset Allocation
Correlation between different markets using returns data
Portfolio standard deviation
Efficient frontier and our recommendation

3. Benefits of International Asset Allocation
Greater diversification.

4. Correlations between the different markets using returns data (Problem 4b)

5. Correlations between the different markets using returns data – Cont.

6. Portfolio Standard Deviation (Problem 4d)

7. Portfolio Standard Deviation (Problem 4d)

8. Efficient Frontier
Minimum Variance Portfolio

9. Recommendation

10. Reasoning Behind the Recommendation
International asset allocation--- Diversification
Portfolio risk management and optimization