# IBM has substantial operations

IBM has substantial operations in many countries, in- cluding the United States, Canada, and Germany. Go to http://ﬁnance.yahoo.com/q?s=ibm  and  click  on  1y just below the chart provided.1.   Scroll down and click on Historical Prices. (Or ap- ply this exercise to a different MNC.) Set the date range so that you can obtain quarterly values of the U.S. stock index for the last 20 quarters. In- sert the quarterly data on a spreadsheet. Compute the percentage change in IBM’s stock price for each quarter. Then go to http://ﬁnance.yahoo.com/ intlindices?e=americas and click on index GSPC (which represents the U.S. stock market index), sothat you can derive the quarterly percentage change in the U.S. stock index over the last 20 quarters.Then run a regression analysis with IBM’s quarterly return (percentage change in stock price) as the dependent variable and the quarterly percentage change in the U.S. stock market’s value as the inde- pendent variable. (Appendix C explains how Excel can be used to run regression analysis.) The slope coefﬁcient serves as an estimate of the sensitivity of IBM’s value to the U.S. market returns. Also, check the ﬁt of the relationship based on the R-squared statistic.2.   Go   to   http://ﬁnance.yahoo.com/intlindices? e=europe and click on GDAXI (the German stock market index). Repeat the process so that you can assess IBM’s sensitivity to the German stock mar- ket. Compare the slope coefﬁcient between the two analyses. Is IBM’s value more sensitive to the U.S. market or the German market? Does the U.S. mar- ket or the German market explain a higher propor- tion of the variation in IBM’s returns (check theR-squared statistic)? Offer an explanation of your results.