Introduction to Political and Economic Risk/Assessment
|Unit 1.1- Intro to Political and Economic Risk||
1. Which of the following factors do companies find the most difficult to assess when initially trying to penetrate a foreign market?
- a. the need to obtain legal advice on the country in question
- b. evaluating the socio-cultural and socio-economic factors of the foreign environment and the need to visit and assess the foreign environment without being dependent only on information provided
- c. the basic need for the product or potential for foreign trade or investment
- d. the evaluation of country risk and exposure
2. The inability or unwillingness of the buyer to accept delivery of a shipment when it is ready is referred to as
- a. economic risk.
- b. political risk.
- c. commercial risk.
- d. country risk.
3. Fluctuation of exchange rates causing the price products to plummet and causing the seller to renegotiate pricing before shipment would be considered
- a. commercial risk.
- b. country risk.
- c. political risk.
- d. economic risk.
4. Country risk =
- a. political risk + commercial risk.
- b. economic risk + commercial risk.
- c. political risk + economic risk.
- d. commercial risk + transaction risk.
(Correct answers: 1=b, 2=c, 3=d, 4=c.)