Impact of COVID-19 on Domestic Financial Markets and Institutions - Report

This assignment accounts for 100% of the overall mark for the module. You must attempt all the parts to meet the learning outcomes.

• Length maximum of 3,000 words (with a tolerance level of 10%) which must be stated at the cover page of the assignment.
• Your report should be well-structured and professional. It should include a short executive summary (not included in the word count).
• All your work should be supported with charts, graphs and illustrations which should be inserted at an appropriate point in the text and should be easily readable.
• While creating the report, you are required to refer to books and academic journal articles and authentic sources. Do NOT use Wikipedia, Investopedia, Investorword, tutor4u and other non-academic sources.
• Your reference list and citations should follow a consistent style throughout your work.
• Quotations of more than 2 lines must be indented and in italics with the reference and page number stated. Shorter quotations should be in italics but do not need to be indented.
• If you are attaching any appendices, please keep it to the minimum.

You are required to create a detailed report on the impact of COVID-19 on domestic financial markets and institutions for a country of your choice. You should use the same country for all parts of the report. Your discussion should be supported by illustrations and academic literature. You are asked to include the following topics:

The Money Markets: Examine the impact of COVID-19 on the money markets. Critically discuss the evolution of interest rates (i.e. discount rates) and credit spreads of various money market instruments and explain the factors that caused the trends you observe. (25 marks)

The Bond Markets: Explain how and why was bond market affected? Critically evaluate how portfolio value, current yield and yield to maturity was influenced for investors

(i) selling their bond portfolio during pandemic but before maturity

(ii) holding the bond portfolio till maturity

(iii) starting to invest in bond markets during pandemic. (25 marks)

The Stock Markets: Discuss the response of stock and currency markets to COVID-19. Is there evidence of market (in)efficiency? Comment on whether the behaviour of these markets (and participants) was rational or not. (25 marks)

Central Bank Intervention: Discuss how the central bank of the country you have chosen has intervened in the financial markets to maintain financial stability and support economic growth, in response to Covid-19 pandemic. Using literature, elaborate on the policy tools used and the impact of such intervention on the financial markets and wider economy. What other actions by the central bank could have improved the current state of the markets and economy? (25 marks)

This assessment will contribute directly to the following Postgraduate programme goals and objectives. (Insert an ‘X’ in boxes where applicable, referring to appropriate programme specification for mapping details)

1. Demonstrate awareness of their personal strengths and weaknesses through critical reflective practice.
2. Understand and challenge personal patterns of thinking and behaving.

1. Demonstrate their ability to work in diverse groups and teams.
2. Reflect on their own ethical values.

1. Demonstrate their personal contribution to team effectiveness.
2. Communicate complex issues effectively.
3. Demonstrate decision making and problem-solving skills.
4. Carry out presentations and lead discussions

1. Acquire, interpret, and apply knowledge of international business, management, and organisational functions.

1. Plan and complete a major individual piece of research on a contemporary business, management, or leadership topic of their choice.
2. Demonstrate skills of analysis and synthesis in the application of research methods to the exploration of contemporary business issues.

1. Demonstrate specialist functional knowledge in relation to your programme of study.