Practice Question Set: Country Risk: Country Risk: Determinants, Measures, and Implications

Chapter 5. Country Risk Practice Question set contains 29 pages covering the following learning objectives:

* Identify sources of country risk.

* Explain how a country’s position in the economic growth life cycle, political risk, legal risk, and economic structure affect its risk exposure.

* Evaluate composite measures of risk that incorporate all major types of country risk.

* Compare instances of sovereign default in both foreign currency debt and local currency debt, and explain common causes of sovereign defaults.

* Describe the consequences of sovereign default.

* Describe factors that influence the level of sovereign default risk; explain and assess how rating agencies measure sovereign default risks.

* Describe characteristics of sovereign credit spreads and sovereign CDS, and compare the use of sovereign spreads to credit ratings.

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