You are the CEO of a company that has to choose between making a $100 million investment in either Russia or Poland. Both investments promise the same long-run return, so your choice of which investment to make is driven by considerations of risk.

1. Assess the various risks of doing business in each of these nations. Compare Poland and Russia in terms of how easily contracts are enforced, how property rights can be registered, and how investors can be protected. Identify in which area you see the greatest difference.
2. Which investment would you favor and why?