Abstract:
The world economies are often measured by how much their stock exchanges have
gained or lost. Sometimes, another indicator of economic growth involves the usage of
currency rates between two different countries. This research paper has attempted to
find out whether there is any link between the exchange rate of a country (with respect
to another country’s), and the country’s stock exchange index. In this specific test, the
month-end values of the Karachi Stock Exchange index has been taken into account in
tandem with the Rupee-Dollar rate. The research showed that while there wasn’t any
direct link, the confidence level in the research may be increased by eliminating any
extraneous variables (such as political instability) in order to obtain a more transparent
result.
