1. Country Risk Ratings. Assauer Inc. would like to assess the country risk of Glovanskia. Assauer has identified various political and financial risk factors, as shown below. (High numbers are good!)

Political Risk Factor Assigned Rating Assigned Weight

Blockage of fund transfers 5 30%

Bureaucracy 4 70%

Financial Risk Factor Assigned Rating Assigned Weight

Interest rate 1 10%

Inflation 4 20%

Exchange rate 5 30%

Competition 4 20%

Growth 5 20%

Assauer has assigned an overall rating of 60 percent to political risk factors and of 40 percent to financial risk factors. Assauer is not willing to consider Glovanskia for investment if the country risk rating is below 4.0. Should Assauer consider Glovanskia for investment? Show calculations.