Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

a)Peter just found a new job and now he has $1000 for making investment for every month. Because of the pandemic, he would like to

a)Peter just found a new job and now he has $1000 for making investment for every month. Because of the pandemic, he would like to invest in the medical product manufacturing stocks in both Japan and the US in each month. Suggest how he can do that and suggest how he can be benefitted by this approach. Elaborate your answers in detail by stating how it enables him to do four things which normally cannot be done without adopting this approach. (5 marks)

b)In order to cope with the unemployment situation in the US due to the pandemic, the Federal Reserve has carried out expansionary monetary policies, which results in a change of the interest rate in the US. However, given that the housing prices in Hong Kong are already extremely high, reducing the interest rate in Hong Kong may pose the risk of an increase in the housing prices. Therefore, is it possible for the Hong Kong Monetary Authority to act contrary to the Federal Reserve by increasing the interest rate in the long run? What are the consequences? Explain your answer in details. (12 marks)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Management Principles And Applications

Authors: Sheridan Titman

9th Edition

0655705457, 9780655705451

More Books

Students also viewed these Finance questions