Describe political risk on a macro and micro level and provide examples of each.

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Managing International Risks & Ethics in Finance Investment
There are several risks associated with operating a multinational corporation. Anycompany doing business in a foreign country has to consider political or country risks. Especially if the target country has a relatively unstable political environment, financial managers must incorporate the potential risk into the cost of the project.

Discuss the following statements/questions:
1. Given the risks associated with an MNC, discuss why a firm would choose to operate as an MNC.
2. Describe political risk on a macro and micro level and provide examples of each.
3. Why is the repatriation of cash flows from an overseas project considered critical?

Reading Requirement: You may also conduct your own research
Fabozzi, F. J. & Peterson Drake, P. (2009). Finance: Capital Markets, Financial Management, and Investment Management. New Jersey: Wiley. Retrieved from EBSCO eBooks in the Touro Library. (See Chapter below).
• Chapter 16: Financial Risk Management

Video Links
• Introduction to Foreign Exchange Markets:
• Currency Risk (An explanation of currency risk):
• Risk factors in a forward foreign currency contract:
• International cost of capital:

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