Using the Case Study, Innocents Abroad: Currencies and International Stock Returns. For this exercise you will need to read the case study and use the data provided in the attached spreadsheet. You will be using knowledge gained in International Finance and Statistics for Business Decision Making. The spreadsheet provided along with this document shows monthly index values for 5 major equity markets in the world along with Foreign Exchange values are also for each of those markets for each month.

1. Using EXCEL calculate the following:
   1. Index values are given in local currency. Adjust them into US values.
   2. Calculate average monthly returns for both local currencies return and USD adjusted returns. What can you observe from these calculations?
   3. Calculate the volatility of returns both in local currency terms as well as USD adjusted returns. What do you observe?
   4. Calculate pairwise correlations (In EXCEL) using USD returns (correlate each market return with every other market return individually). How are these markets related or unrelated to each other? Why are some markets more correlated to each other than others?