When quantifying country risk:
A) weights should be equally allocated among factors.
B) weights should be assigned to the political and financial factors according to their perceived importance.
C) it is not generally necessary to construct separate ratings for political and financial risk since these will be equally weighed in the final analysis.
D) the derived factors will be identical for all MNCs conducting business in that country.

Question

Quizplus · Accepted Answer

Assigning weights to the political and financial factors according to their perceived importance is the most common method for quantifying country risk. Equally allocating weights among factors or assuming that all MNCs will derive the same factors is not accurate or effective in assessing country risk.

When Quantifying Country Risk