3. In recent decades, large direct and portfolio investment flows from Hong Kong and mainland China have flowed into Canada. Prior to the return of Hong Kong to Chinese rule in July 1997, many of these flows were "flight capital motivated by uncertainty about how Beijing would rule Hong Kong. More recently, the flows have been motivated by the desire to invest in natural resource production that feeds China's growing economy. Note that Hong Kong has always been a financially open economy while barriers to capital flows have lessened the ability of Chinese citizens to invest overseas and limit foreign investments inside China. (6 each) a.) Use the Gordon Growth Model to offer a rational explanation for the effect of these flows on Canada's stock market, real estate, and mining investments. b.] Offer two irrationality-based explanations, with at least one using the Gordon Growth Model. c.] Suppose China liberalizes its currency and investment regime so that locals can freely send money outside China and can buy stocks and other investments worldwide. Explain how this alters your answers above. d.] Modify your answer to c.] to explain a scenario under which, in contrast, Canada's asset values drop substantially after the liberalization. 3. In recent decades, large direct and portfolio investment flows from Hong Kong and mainland China have flowed into Canada. Prior to the return of Hong Kong to Chinese rule in July 1997, many of these flows were "flight capital motivated by uncertainty about how Beijing would rule Hong Kong. More recently, the flows have been motivated by the desire to invest in natural resource production that feeds China's growing economy. Note that Hong Kong has always been a financially open economy while barriers to capital flows have lessened the ability of Chinese citizens to invest overseas and limit foreign investments inside China. (6 each) a.) Use the Gordon Growth Model to offer a rational explanation for the effect of these flows on Canada's stock market, real estate, and mining investments. b.] Offer two irrationality-based explanations, with at least one using the Gordon Growth Model. c.] Suppose China liberalizes its currency and investment regime so that locals can freely send money outside China and can buy stocks and other investments worldwide. Explain how this alters your answers above. d.] Modify your answer to c.] to explain a scenario under which, in contrast, Canada's asset values drop substantially after the liberalization