Exam 16: Country Risk Analysis

The Delphi technique:

A blockage of fund transfers imposed by a host government usually forces a subsidiary to donate the funds to the host government.

Country risk analysis is important because it:

Higher interest rates in a foreign country tend to ____ the growth of the country's economy and ____ demand for the MNC's product.

A ____ currency may ____ demand for the products exported by the country and therefore reduce the country's production and national income.

The Multilateral Investment Guarantee Agency can provide MNCs implementing direct foreign investment in less developed countries with:​

Which of the following is not a way in which country risk analysis can be used?

____ is(are) not a political risk factor.​

Which of the following is not a strategy that could be used by an MNC to reduce its exposure to a host government takeover?

The checklist approach:​

Country risk analysis is important because it:

An MNC must assess country risk not only in countries where it currently does business but also in those where it expects to export or establish subsidiaries.

An MNC considers direct foreign investment in Germany. It is mainly concerned with the subsidiary's ability to generate sufficient sales there. The country risk characteristic that would have the largest direct impact on the subsidiary's sales in Germany is:

Adjustments to incorporate country risk into the capital budgeting analysis would involve either the addition of a risk premium to the discount rate or a reduction of the cash flows.

A mild form of political risk is a tendency of residents to purchase only:

MNCs can purchase insurance to cover the risk of expropriation. Which of the following is not a source of this type of insurance?

Since country risk is constantly changing and events in other parts of the world are largely unpredictable, country risk analysis is not important for MNCs.