1. Describe the differences between country risk and political risk. What is sovereign risk?
2. What economic variables would give some indi- cation of the country risk present in a particular country?
3. Suppose an MNC is considering investing in Bolivia. Will an overall assessment of Bolivia's country risk suffice to understand the political risk present in the investment?
4. What are three political risk factors?
5. When, where, and why did the Debt Crisis start?
6. What is debt overhang?
7. What is a debt buyback? Why was a program of debt buybacks not sufficient to resolve the Debt Crisis?
8. What were the main characteristics of the Brady Plan?
9. Why should the discount rate not be adjusted for political risk?
10. What are some examples of organizations that provide country risk ratings?
11. How can we use current quantitative information to predict future political events, such as expropriation?