Archive:Introduction to Political and Economic Risk/Assessment

Unit 1.1-Introduction to Political and Economic Risk

Introduction | Cultural Issues | Corporate Risks | Country-Related Risks | Economic Risks | Cultural Risks | Summary | Resources | Activities | Assessment Go to Unit 1.1 | Unit 1.2 | Unit 1.3 Return to Trade Finance Module 1: Political and Economic Risk

Assessment

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.)

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