Market, exchange rate and interest rate risks of German financial and non-financial companies. Industry-Level Analysis

Master's Thesis from the year 2016 in the subject Business economics - Investment and Finance, grade: 87%, , language: English, abstract: Are stock returns of German financial and non-financial institutions sensitive to changes in exchange rate, interest rate and market return? Does the exposure to interest rate, exchange rate and market return differ between the different industries in Germany? Thе рареr expands previous research and sheds new lights on this issues by: firstly, exаminining the impact of exchnage rate exposures on equity valuations in German stock market after the introduction of the euro. The second objective is to investigate the impact of exchange rate and interest rate on German industries stock return. The third objective is to evaluate the exposure to market, exchnage rate, and interest rate risks on companies stock returns. Such a comparative study provides important insights into the industry structure of the German stock market. Here the German case is of interest for different reasons. First, existing studies refer especially on the US, UK evidence. The findings of these studies needs to be examined agianst evidence from other major developed countries such as Germany, whose stock market ranks fourth in terms of market capitalisation after the US, UK and Japan. Second, the growing significance of the German share index over the last decades has posioned Germany among the leading global economic powers. Also, many German industry sectors are heavily export-oriented and are more sensitive to unticipated changes in exchnage rates and interets rates. Third, no study has yet concluded a comprehensive analysis of the effects of the aforementioned variables on German industires.