Question
7. Country risk rating In doing country risk rating for a country called Bapua-Ginny a country analyst made the following observations: Variable/Ratio Weight Value Product
7.Country risk rating
In doing country risk rating for a country called Bapua-Ginny a country analyst made the following observations:
Variable/Ratio Weight Value Product
GNP growth 10 0.05
GNP/Population 5 0.50
Inflation -10 0.10
Reserves/ Imports | 5 | 0.75 |
Current Account/ GNP | 15 | -0.15 |
Debt service ratio | -25 | 0.25 |
Debt/ GNP
Political stability | -15
15 | 0.30
0.50 |
7) Based on the observations above the country analyst wants to calculate a country risk rating-score for this country. Please fill out last column entitled Product based on data provided.
8. Now calculate the country risk rating-score by adding all the numbers you entered in the column entitled Product in Question 7 above. How do you normalize this country risk rating-score? What possible use can this normalized country risk rating-score be for multinational financial-managers?
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