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Colombia Investment Risk Assessment

   

Added on  2019-09-30

2 Pages599 Words162 Views
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Answer 1 (I)The economic indicators that have been selected for the assessment of Colombia are Gross Domestic Product, Inflation, and Current Account Balance. Considering the Gross Domestic Product, below risk table has been identified using which the risk level of Colombian economy will be assessed:As per current economic data of Colombia, below assessments can be made regarding its risk and return:ColombiaYearGDP (%)ConditionRisk/Return20144.6 (4.0-5.9)Low GrowthMedium20004.4 (4.0-5.9)Low GrowthMedium19906 (6.0-10.0)SustainableLowConsidering the data of 2014, it can be stated that the economy is in Low Growth situation. Therefore, the investors can consider investing due to the Medium risk.The second indicator is inflation, whose indicator values have been shown below:Inflation (%)Inflation TypeRisk<0.0DeflationHigh0.0-0.9LowMedium1.0-3.0Price StabilityLow>3.1HighHighConsidering the above table and the current economic data of Colombia, below table can be developed:YearInflation Rate (%)Inflation TypeRisk20141.8 (1.0-3.0)Price StabilityLow200031.8 (>3.1)HighHigh199026.1 (>3.1)HighHigh
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