1. Are there any hidden assumptions or price rigidities in the country or countries that might inhibit market force indicators from revealing the true economic health of the country, thereby either preventing government policy actions from correcting the problems or otherwise making them ineffective and counterproductive?

2. What is the current domestic and international economic situation of each country relative to the benchmark performance measures for that country?

3. Is the country currently following appropriate economic policies from a domestic as well as an international perspective? Provide supporting justification for your answer.

4. When the tools of country risk analysis are applied to the different countries being analyzed, which country is more likely to have what kind of crisis and why?

5. If you recommend that Tower Associates proceed with a transaction in one of the selected countries, which strategy would you suggest they follow: a foreign exchange hedging strategy or a country risk crisis management strategy? Explain and justify your recommendation.

6. What are some of the steps that Tower Associates can take to help mitigate and manage some of the risk involved if they proceed with the transaction, such as: foreign exchange risk, sovereign risks, liquidity risks, market risks, insolvency, and credit risks?