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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

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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