Question 4 [This question has three parts: (A), (B) and (C)] Part-A Capital flight was the most significant reason of the Latin American debt crisis in the early 1980s. What factors have contributed to that capital flight? (3 marks) Part B Amrica Mvil (AMX) is listed and traded in both Mexico and New York. The company's operations were hurt by the COVID-19 pandemic in the first quarter of 2020. The company registers its income in Mexican pesos (MXN). AMX's stock price went from MXN14.50 to MXN13.00 from January 2, 2020 to March 31, 2020 (Q1 2020). The company makes a dividend payment of MXNO.18 in June and November. The exchange rate of MXN/USD went from 19.00 to 22.00 from January 2, 2020 to March 31, 2020. What was the dollar return on AMX? (4 marks) Part C Assuming no transaction costs, suppose Bank of Tokyo quotes AUD1 = 80, Suisse Bank quotes CHF1 = 97 and ANZ quotes AUD1 = CHF1.15. How could you take profitable advantage of these rates using a hypothetical investment amount of AUD one million? (hint: AUD = Australian dollar; \ = Japanese yen; CHF = Swiss Franc; you can buy or sell AUD at the stated rates). (4 marks) Question 4 [This question has three parts: (A), (B) and (C)] Part-A Capital flight was the most significant reason of the Latin American debt crisis in the early 1980s. What factors have contributed to that capital flight? (3 marks) Part B Amrica Mvil (AMX) is listed and traded in both Mexico and New York. The company's operations were hurt by the COVID-19 pandemic in the first quarter of 2020. The company registers its income in Mexican pesos (MXN). AMX's stock price went from MXN14.50 to MXN13.00 from January 2, 2020 to March 31, 2020 (Q1 2020). The company makes a dividend payment of MXNO.18 in June and November. The exchange rate of MXN/USD went from 19.00 to 22.00 from January 2, 2020 to March 31, 2020. What was the dollar return on AMX? (4 marks) Part C Assuming no transaction costs, suppose Bank of Tokyo quotes AUD1 = 80, Suisse Bank quotes CHF1 = 97 and ANZ quotes AUD1 = CHF1.15. How could you take profitable advantage of these rates using a hypothetical investment amount of AUD one million? (hint: AUD = Australian dollar; \ = Japanese yen; CHF = Swiss Franc; you can buy or sell AUD at the stated rates). (4 marks)