Exam 18: Political Risk Assessment and Management

FDI may require firms to be flexible in how they do business. Which of the following is NOT a potential problem associated with a firm adapting to a government requirement of local sourcing?

________ is NOT one of the three main country-specific risks as outlined by your authors.

Of the following, which would NOT be considered a firm-specific risk?

Generally, firms adjust for the additional risk from investing in foreign locations using one of two techniques. List and explain the two techniques, cite advantages and disadvantages of each, and provide an example of when each might be most appropriate.

A foreign investment undertaken by an MNE that is considered risky from a political and currency perspective may still be undertaken because:

________, also known as macro risks, are political risks that affect the firm at the project or corporate level but originate at the country level.

The USA has a value of 7.4 on the 2007 Corruption Perception Index. Although this value does not put the USA at the top of the list, the USA is still perceived as one of the ________ least corrupt countries in the world in which to do business.

The Scandinavian countries such as Denmark, Finland, and Sweden, are perceived as having the lowest level of corruption in the world.

________ is the ability to exercise effective control over a foreign subsidiary within a country's legal and political environment.

Which of the following is NOT a technique for moving blocked funds out of a country?

Over the last three decades, the country of Zimbabwe has suffered ________.

________ is the risk that the host government will take specific steps that prevent the foreign affiliate from exercising control over the firm's assets.

Which of the following could be considered an example of forced reinvestment if the blockage of funds was expected to be temporary?

Macro political risk analysis is likely to include all but which of the following?

Blocked funds are cash flows that

A ________ loan, also known as ________ is a parent-to-affiliate loan channeled through a financial intermediary such as a large commercial bank.