finance

If someone invested US dollars into the US stock market by the way of buying the Standard & Poors 500 index, the price fluctuations of this US dollar-denominated portfolio from 1/03/2000 to 12/27/2010 would look like the following. But what if a foreign investor decides to invest into the US stocks? She needs to convert her currency into US dollars first and then buy the stocks. Whenever she decides to close the position, she sells the stocks and then converts US dollars back to her currency. Hence, she is subject to at least two different risks: 1) the US stock market risk and 2) the currency risk. Your task is to convert the fluctuations in the US dollar-denominated S&P 500 to the fluctuations in S&P 500 denominated in the Swiss franc. Historical data for the S&P 500 can be downloaded from http://finance.yahoo.com/q/hp?s=%5EGSPC. Historical foreign exchange rates can be downloaded from http://www.federalreserve.gov/RELEASES/H10/Hist/. Do pay attention to how the exchange rate is quoted, i.e., whether it is expressed as US dollars per unit of the foreign currency or foreign currency per one US dollar. Your solution must consist of the plot of the daily S&P 500 denominated in both US$ and Swiss franc on the Y axes, and the respective dates on the X axis, as well as the raw data you used in order to construct the graph and any conversions of that data you may have had to perform.