Question 3 Part A Black swan event has markets in flap The Australian share market has suffered its worst week since the global financial crisis as fear over the rapid spread of coronavirus wiped more than $200 billion from company values. A week-long selling spree intensified yesterday as the nations key stock market benchmark, the ASX 200, plunged 3.3 per cent to 6441.2 points. The rout the biggest one-day drop in 4 years wiped $65.1 billion from the value of the nations 200 biggest listed companies. It took the weeks losses to $210.1 billion and plunged the market into an official correction. The market touched a record high of 7162.4 points late last week but has been sold off every day since, shedding 10.1 per cent in total. This weeks fall is the biggest since October 2008, when the local bourse plunged by more than 15 per cent after the collapse of US investment bank Lehman Brothers sent a shockwave through the global financial system. Investors across the globe have hit the sell button this week as COVID-19 has flared in Asia, Europe and the Middle East. Its been unbelievable, Wilson Asset Management chair Geoff Wilson said. The major question now is, are we heading into a bear market? Mr Wilson, who manages $3 billion in funds, has increased his cash holdings from 12 per cent to 20 per cent this week by selling shares as a defensive measure. Montgomery Investment Management chief investment officer Roger Montgomery said COVID-19 was a black swan event a major global disruption that had blindsided investors at a time stock prices were at record highs. The ASX 200 surged 18.4 per cent in 2019 its best year in a decade and jumped another 7.2 per cent this year before the virus sparked panic on markets. Extract from Dagge, J. Black swan event has markets in flap. Herald Sun; Melbourne. February 29, 2020. Required I. Montgomery Investment Management chief investment officer Roger Montgomery said COVID-19 was a black swan event. Why do you think Covid-19 was labelled as a black swan event? (Maximum words 250) (5 Marks) II. What theories from ACC30008 can be applied to the discussion reported in the article? (Maximum words 250) (5 Marks) (10 Marks)