Country risk ratings. Assauer Ltd would like to assess the country risk of Glovanskia. Assauer has identified various political and financial risk factors, as shown below.
|
Political Risk Factor
|
Assigned Rating
|
Assigned Weight
|
|
Blockage of fund transfers
|
5
|
40%
|
|
Bureaucracy
|
3
|
60%
|
|
Financial Risk Factor
|
Assigned Rating
|
Assigned Weight
|
|
Interest rate
|
1
|
10%
|
|
Inflation
|
4
|
20%
|
|
Exchange rate
|
5
|
30%
|
|
Competition
|
4
|
20%
|
|
Growth
|
5
|
20%
|
Assauer has assigned an overall rating of 80% to political risk factors and of 20% to financial risk factors. Assauer is not willing to consider Glovanskia for investment if the country risk rating is below 4.0. Should Assauer consider Glovanskia for investment?