Q1) Are there any hidden assumptions or price rigidities in the country or countries that might inhibit market force indicators from revealing the true economic health of the country, thereby either preventing government policy actions from correcting the problems or otherwise making them ineffective and counterproductive ?

Q2) What is the current domestic and international situation of each country relative to benchmark performance measures for that country?

Q3) Is the country currently following appropriate economic policies from a domestics as well as an international perspective? Provide supporting justification?

Q4) When the basic tool of country risk analysis are applied to the different countries being analyzed, which country is more likely to have what kind of crisis, and why?

Q5) If you recommend that TA proceed with a transaction in one of the selected countries, which strategy would you suggest they follow: a foreign exchange hedging strategy or a country risk crisis management strategy? Explain and justify your recommendation.

Answer rating: 100% (QA)

Q1 Hidden assumptions or price rigidities in a country can indeed inhibit market force indicators from accurately reflecting the true economic health ... View the full answer