Country Risk Assessment Assignment Sample

• Subject Name : risk management

Aspects Upon GCI Index and its Derivatives

Abstract on Country Risk Assessment 

The present report discusses aspects about calculus involved in the GCI index, for which twelve factors are implied as independent, this being equal to a weighted mean of the measures of each factor. GCI stands for Global Competitiveness Index and it is a measure of resilience. 1-GCI is a measure of pressure.

Methodology & Content of Country Risk Assessment 

The present paper discusses the assessment of risk for different countries where for each twelve pillars are involved. These twelve pillars imply the calculus upon GCI index as a weighted arithmetical mean.

Enumeration and definition of the twelve pillars

1.Institutions

As in any society, public and private institutions play an important role in the development of final products.

2.Infrastructure

In this category, one can mention transport, electricity and gases, tellecomunication network.

3.Macroeconomic Environment

About macroeconomic environment, one must look for stability between debits and credits at certain rates of interest. The following equation is useful: S[n]=S[0]*(1+r)n. The following relation is approved to have a macroeconomic stability: S[n]-S[0]>0.

4.Health and Private Education

As the title suggests, private education is an important factor in determining quality in health system.

5.Higher Education and Training

At the final stage of the high-school, the courses of the higher education are suggested to be followed so as to determine efficient features in training.

6.Goods Market Efficiency

When thinking about goods, the following notation is useful: Q. The following formulas apply:

a.Relative Increase: dQ/Q.

b.Marginal factor with production/goods: dX/dQ.

7.Labor Market Efficiency

About this aspect, the following notation is pertinent: L=labor.The following formulas apply:

a.Relative Increase: dL/L.

b.Marginal Factor with Labor: dX/dL.

8.Financial Market Development

The financial market development is in accordance with the flux of buying and selling of stocks, bonds,auctions, decision taken by Supertrends where graphical data is displayed with red and green lines.

Backtest

If P1>P0 à SELL.

If P1<P0 à BUY.

9.Technological Readiness

By this aspect, one understands improvements in technology done by software of the up-to-date generation.

10.Market Size

Market size is the decisive factor in computing the ratio GDP/N, acting as a measure.

11.Business Sophistication

The degree or extent of which a business / ltd is improved involves the quality of its products and the measure of income.

12.Innovation

By innovation, one can infer synonyms related to “CREATION” and “NEW”.

Definition: Country Risk Assessment 

Let us denote X[i] pillar i of measure x[i] having weight w[i].Then, GCI index is computed as follows:

GCI=sum(x[i]*w[i]), for i=1,12.

Steps in computing aggregate risk

1.Quantile

Quantile represents the number on the [Ox) axis that can take any real value, named as SIGNED. An UNSIGNED real number means or denotes that it is positive. It is shortlisted as Q.

2.Risk or probability

The following formula applies for a probability density function f:RàR

3.Aggregate Risk for Several Independent Factors

Let us denote by Y[i] the events with p[i] probability of outcome.

Conclusion on Country Risk Assessment 

To sum up, the management of risk stands for assessing this as a measure of probability depending of a probability density function (pdf), not necessarily to be symmetrical.

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