This assignment is about multinational financial management. So, the following plot shows the current account balance for the five BRICS economies (Brazil, Russia, India, China and South Africa) from the first quarter of 2003 to the second quarter of 2019:

Multinational Financial Management – Five BRICS economies.

Firstly, this paper consists of FOUR questions. Secondly, each question carries 25 marks. Your answer to each question should INCLUDE the full references of the articles, books and other sources cited. You can present the references at the end of your answer to each question. Assessment Questions 1. The following plot shows the current account balance (as a percent of GDP) for the five BRICS economies (Brazil, Russia, India, China and South Africa) from the first quarter of 2003 to the second quarter of 2019. A)Discuss the trend of the current account balance (as a percent of GDP) over the sample period. Its corresponding implication for the degree of competitiveness in international trade, for each economy. [10 marks]

Multinational Financial Management – Five BRICS economies.

B) If you aim to run a domestic business in one of these economies… Discuss which economy  you would choose to invest in, and why? [5 marks]. C) Suppose that you are an analyst for the central bank of Brazil. Discuss how its Balance of Payment accounts are affected by the following: (i) A budget deficit financed by foreign borrowing, and (ii) An export quota for its agricultural commodities. [5 marks] d) What is the type of exchange rate system adopted by China? Discuss its advantages and disadvantages. [5 marks] 2. The outbreak of the coronavirus (COVID-19) sent most western countries to a deep recession.

Multinational Financial Management – Five BRICS economies.

As a result, the governments and central banks of most countries implemented stimulus policies to tackle the impact of the pandemic on their economies, causing a large increase in the money supply of such economies. For example, the total stimulus plans implemented in the US. Mainly through buying US government bonds has increased its money supply by about 7 trillion dollars, since the outbreak of the pandemic. Answer the following questions.. A) Explain the impact of this increase of US money supply on the value of the US dollar. Support your discussion with appropriate graphs. [6 marks] b) Explain what is meant by the bid-ask spread in the foreign exchange (FX) market.

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