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Based on the Balance of Payments forecasts for (foreign) Country 1 and Country 2, $Billion 2020 2021 2022 2023 Country 1 Current Account -10 -12

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Based on the Balance of Payments forecasts for (foreign) Country 1 and Country 2, $Billion 2020 2021 2022 2023 Country 1 Current Account -10 -12 -11 -12 Capital Account 0 0 0 0 Financial Account excl Reserves 2 5 9 12 Reserves 8 7 2 0 Country 2 Current Account -20 -24 -22 -24 Capital Account 0 0 0 Financial Account excl Reserves 16 14 4 0 Reserves 4 10 18 24 which investment strategy is most likely to provide the highest return on investment in home currency? O a. A portfolio of stock in companies from Country 1 O b. A portfolio of stock in companies from Country 2 O c. Neither country is likely to provide a higher return on investment than the other d. Country 1 stocks should be shorted and Country 2 stocks should be longed Based on the Balance of Payments forecasts for (foreign) Country 1 and Country 2, $Billion 2020 2021 2022 2023 Country 1 Current Account -10 -12 -11 -12 Capital Account 0 0 0 0 Financial Account excl Reserves 2 5 9 12 Reserves 8 7 2 0 Country 2 Current Account -20 -24 -22 -24 Capital Account 0 0 0 Financial Account excl Reserves 16 14 4 0 Reserves 4 10 18 24 which investment strategy is most likely to provide the highest return on investment in home currency? O a. A portfolio of stock in companies from Country 1 O b. A portfolio of stock in companies from Country 2 O c. Neither country is likely to provide a higher return on investment than the other d. Country 1 stocks should be shorted and Country 2 stocks should be longed

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