Module 10 Short Answer (3 Marks)

Please compare Country A and Country B with respect to Sovereign risk.

a) For each measure listed, please begin by ranking the two countries: 1 = lower risk; 2 = higher risk. (2 marks)

(Copy and paste the table into the answer panel and populate)

Measure	Country A	Country B	Rank A	Rank B
Debt service ratio	85	100
Import ratio	50%	35%
Investment ratio	20%	22%
VAREX	0.02	0.025

b) Which country do you believe has the lower sovereign risk? Why? (1 mark)