With the great recession, FED bought toxic assets from banks and increased its balance sheet by six fold. TCMB did almost the same with huge credit expansion in the recent years and forced banks to buy government bonds. Though this policy enabled very high profits, how would an increase of interest rates effect the insolvency of the banks. 4

With the great recession, FED bought toxic assets from banks and increased its balance sheet by six fold. TCMB did almost the same with huge credit expansion in the recent years and forced banks to buy government bonds. Though this policy enabled very high profits, how would an increase of interest rates effect the insolvency of the banks. Merrill Lynch, established in USA, would like to assess the country risk of Ukraine. Merrit] Lynch has identified various political and financial risk factors during the Russia-Ukraine War, as shown below. Merrill Lynch company has assigned an overall rating of 65 percent to political risk factors and of 35 percent to financial risk factors. Merrill Lynch is not willing to consider Ukraine for investment if the country risk rating is above 4.0. Should Merrill Lynch consider Ukraine for investment? Calculate the country risk of Ukraine and decide whether to invest or not to this country