This assignment can be completed individually, or in groups (max 5 students). One submission per group, please note the names of all group members on the coverpage of your submission. Ensure that you have taken the time to edit your work to maintain a high level of professionalism in your writing. Please also ensure that you use citation style to properly cite all of your sources.

In groups discuss the following questions. Submit a summary of your discussion as a word/pdf document

Before it invaded Ukraine earlier this year, Russia was considered one of the most credit-worthy countries in the world, given its low debt levels and substantial oil/gas exports. However, currently most investors think that it is only a matter of time before Russia defaults on their debt obligations.

1. Take a look at the yields on 20Y Russian Bonds (https://tradingeconomics.com/russia/20-year-bond-yield). What might explain some of the volatility you see over the last year?
2. How might information asymmetries impact the yields on government bonds? Do you think this is priced into Russian bond yields? Explain.
3. Why do you think that some investors are currently willing to buy bonds issued by the Russian government?
4. Take a look at the MOEX (Moscow Exchange - https://www.cnbc.com/quotes/.IMOEX). This index tracks the performance of the 50 largest and most liquid Russian companies from 10 main economy sectors, listed on The Moscow Stock Exchange. How does the movement on this exchange compare to the Russian Bond Market?
5. Do you think there are more or fewer information asymmetries in the Russian Bond market versus the Russian Stock Market? Explain.
6. What could be done to solve these information asymmetries? Who is currently trying to do so?