country risk

Companies and Banks such as the United States Merchant Bank use country risk analysis to assess various categories of risks for their businesses. Typically, there are always a number of factors which determine the overall risk for investments: Political, economic, financial, external, and the investment climate to name a few. Often these are weighted to reflect the risks for any particular project. Similarly, the questions posed in conducting the analysis also take into account the project's particular requirements. A sampling of typical questions is included below:

· Is the political environment stable?

. . .
(1990) "Risks in International Lending"An Introduction to Bank Lending (eds. An interesting point to note is that with a lot of providers the political risk measure is given twice the weight of financial and economic risk. International Finance : Contemporary Issues, Routledge : London. An example is that five financial, thirteen political and six economic factors could be used. Daredevil Investment Trust Corporation anticipated the crisis in Malaysia and accordingly, did not incur heavy losses on its lending to Malaysia.

Political risk assessment scores would be based on subjective analysis of available information. Most SOEs are unprofitable; but the State intends to keep 10,000 of them going and either sell or liquidate the remaining 100,000 or more SOEs. China is likely to be Australia's third largest trading partner (after the US and Japan), within 3 years. Each factor would be assigned a numerical rating within a specified range. (1993) "Country Risk and the Structure of International Intermediation (ed. A higher score would indicate lower risk.

Common topics in this essay:
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Approximate Word count = 2466
Approximate Pages = 10 (250 words per page double spaced)

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