Due to globalization investors have increasing opportunities to invest on international markets for diversification purposes. This thesis illustrates the added risks of investing internationally due to volatile exchange rates. The purpose is to analyze how a volatile exchange rate affect the risk and return of a portfolio invested in Sweden, when the investor is located in Japan, United Kingdom or the USA. To analyze the effect of exchange rate volatility the focus is on a portfolio consisting of Swedish stocks from the Stockholm Stock Exchange (SSE) O-list. First the risk and return to a hypothetical Swedish investor not exposed to exchange rate volatility is calculated. Then the effects the exchange rates had on the risk and return if a US investor, UK investor and a Japanese investor invested in the same portfolio is analyzed. For the historical period 2005 the portfolio generated a return of 34.36% and a risk of 7.7%. The empirical work showed that for the international investors the risk was increased with between 1.95% – 410.52% and that the actual return decreased due to weakening currencies against the Krona. In an attempt to predict future exchange rate movements the thesis analyses two financial relationships, PPP and IRP, to calculate equilibrium movements. Both PPP and IRP predicted a depreciation of the Dollar and Pound Sterling against the Krona over the next period, but an appreciation of the Yen against the Krona over the same period. The analytical discussion covers the importance of a well functioning financial system, the institutional effects on exchange rates and the confidence in government policies and their ability to succeed in doing what has been promised.

<p>Due to globalization investors have increasing opportunities to invest on international markets for diversification purposes. This thesis illustrates the added risks of investing internationally due to volatile exchange rates. The purpose is to analyze how a volatile</p><p>exchange rate affect the risk and return of a portfolio invested in Sweden, when the investor is located in Japan, United Kingdom or the USA.</p><p>To analyze the effect of exchange rate volatility the focus is on a portfolio consisting of Swedish stocks from the Stockholm Stock Exchange (SSE) O-list. First the risk and return to a hypothetical Swedish investor not exposed to exchange rate volatility is calculated.</p><p>Then the effects the exchange rates had on the risk and return if a US investor, UK investor and a Japanese investor invested in the same portfolio is analyzed. For the historical period 2005 the portfolio generated a return of 34.36% and a risk of 7.7%. The empirical work showed that for the international investors the risk was increased</p><p>with between 1.95% – 410.52% and that the actual return decreased due to weakening currencies against the Krona.</p><p>In an attempt to predict future exchange rate movements the thesis analyses two financial relationships, PPP and IRP, to calculate equilibrium movements. Both PPP and IRP predicted a depreciation of the Dollar and Pound Sterling against the Krona over the next</p><p>period, but an appreciation of the Yen against the Krona over the same period.</p><p>The analytical discussion covers the importance of a well functioning financial system, the institutional effects on exchange rates and the confidence in government policies and their ability to succeed in doing what has been promised.</p>

Bakgrund: Hållbarhet har blivit alltmer central i dagens samhälle och investeringar i hållbara alternativ har ökat. Diskussionen kring målen för dessa investeringar inkluderar bland annat etiska aspekter, där investerare strävar efter att påverka företag att agera mer hållbart. Den pågående omställningen påverkar inte bara investerare utan skapar även en ny efterfrågan företagen måste anpassa sig till. Syfte: Syftet med studien är att undersöka och analysera Generation X och Generation Z hållbara investeringsbeslut på den svenska fond- och aktiemarknaden samt undersöka vilka motiv och egenskaper som grundar hållbara investeringar. Metod: Studien har använt sig av en kvantitativ metod med en deduktiv ansats. Det empiriska materialet samlades in genom en digital enkätundersökning, vilket resulterade i 168 svar som utgjorde grunden för den fortsatta analysen genom regressionsanalyser. Resultat: Studiens resultat visade att det inte fanns ett signifikant samband mellan hållbart investerande och generationer. De variabler som visade på ett signifikant samband var i stället Personliga värderingar, Risk &amp; Avkastning, Omgivning samt Kunskap. Slutsats: Ambitionen med studien var att öka förståelsen för hur generationstillhörighet kan påverka hållbart investerande. Således har studien bidragit till en förståelse för vem den hållbara generationen är samt vilka motiv och faktorer som kan påverka hållbart investerande. / Background: Sustainability plays a central role in today’s society, with increased investments in sustainable alternatives. The discussion around the goals of these investments includes both ethical and change-related aspects, where investors strive to influence companies to act more sustainably. The ongoing transition not only affects investors but also creates a new demand that companies must adapt to. Purpose: The purpose of the study is to investigate and analyze Generation X and Generation Z's sustainable investment decisions on the Swedish fund and stock market, as well as to examine the motives and characteristics underlying sustainable investments. Methodology: The study has used a quantitative method with a deductive approach. The empirical data was collected through a digital survey, resulting in 168 responses that formed the basis for further analysis through regression analyses. Results: The study's findings revealed that there was no significant relationship between sustainable investing and generations. Instead, the variables that showed a significant relationship were Personal values, Risk &amp; Return, Environment, and Knowledge. Conclusion: The aim of the study was to enhance understanding of how generational belonging can influence sustainable investing. Thus, the study has contributed to an understanding of who the sustainable generation is, as well as the motives and factors that can affect sustainable investing.