NO.PZ2023090401000062
问题如下：
Question Bank QRS is considering extending loans to corporations based in a frontier market country. A credit risk analyst at the bank has conducted research on the country to determine factors that may affect its country risk and has compiled the following findings:
• Item 1: The country’s economy is dominated by oil production, and it holds significant oil reserves.
• Item 2: The country has recently enacted laws making it easier for investors to file lawsuits against firms and their management teams than before.
• Item 3: The country has recently reformed its legal system to make it more independent of other branches of government.
• Item 4: The country’s sovereign credit spreads have declined over the past year. Which of these items is most likely to have a negative impact on the country’s risk score?
选项：
A.Item 1
B.Item 2
C.Item 3
D.Item 4
解释：
Explanation:
A is correct. A higher dependence on a single commodity makes a country’s overall economy more vulnerable to changes in demand or prices of that commodity.
B is incorrect. A legal system that provides for lawsuits against firms and their management allows investors recourse in the event of insider trading, fraud, or other actions that hurt investors, thereby lowering country risk.
C is incorrect. Because business activities inevitably generate disputes, firms do not want to invest in a country where the legal system is biased or subject to government interference.
D is incorrect. Declining credit spreads signal credit quality improvement.
Section: Valuation and Risk Models
Learning Objective: Explain how a country’s position in the economic growth life cycle, political risk, legal risk, and economic structure affect its risk exposure.
Reference: Global Association of Risk Professionals. Valuation and Risk Models. New York, NY: Pearson, 2022. Chapter 5. Country Risk: Determinants, Measures and Implications.
