The table below provides the correlations among Telmex, a telephone and communications company located in...
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The table below provides the correlations among Telmex, a telephone and communications company located in Mexico, the Mexico stock market index, and the world market index, together with the standard deviations (SD) of returns and expected returns ( (%) The risk-free rate is 5%. Correlation Coefficients Telmex Mexico World SD(%) (%) Telmex 1 0.9 0.6 18 ? Mexico 1 0.75 15 14 World 1 10 12 Suppose that Telmex has made its shares tradeable internationally via cross-listing on the NYSE. b. Discuss the possible effects of international pricing of Telmex shares on the share prices and the firm's investment decisions.
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