Relationship Between Exchange Rate and Stock Prices in Kenya
Abstract
Mutual relations between foreign exchange markets and stock markets have attracted
much attention of researchers and academics since the beginning of 1990s. The last
quarter of a century has witnessed significant changes in the international financial
system such as emergence of new capital markets. gradual abolishment of capital inflows
barriers and foreign exchange restrictions. or adoption of more flexible exchange rate
arrangements in emerging and transition countries. All these mentioned features have
broadened the variety of investment opportunities but, on the other hand, they have also
increased volatility of exchange rates and added a substantial portion of risk to the overall
investment decision and portfolio diversification process. This study, therefore, sought to
establish the relationship between stock prices and exchange rate by establishing the
granger causation between the two.................
Publisher
University of Nairobi
Rights
Attribution-NonCommercial-NoDerivs 3.0 United StatesUsage Rights
http://creativecommons.org/licenses/by-nc-nd/3.0/us/Collections
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