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Compute the country risk factor

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Pierre Imports, a U.S. company, would like to assess the country risk of Bennfi. Pierre has identified the political and financial risk factors shown below.

Political Risk Factor Assigned Rating Assigned Weight
Blockage of fund transfers 4 40%
Bureaucracy 3 60%
Financial Risk Factor Assigned Rating Assigned Weight
Interest Rate 2 10%
Inflation 5 30%
Exchange Rate 5 30%
Competition 3 20%
Growth 4 10%

Pierre has assigned an overall rating of 70 percent to political risk factors and of 30 percent to financial risk factors. Pierre is not willing to consider Bennfi for investment if the country risk rating is less than 3.5. Should Pierre consider Bennfi for investment?

1) Compute the country risk factor

2) Should the company consider Bennfi for investment? Explain.

Reference no: EM132953413

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