Question

Explain some methods of reducing exposure to existing country risk while maintaining the same amount of business within a particular country.

Answer 1

Some of the methods of reducing exposure to existing country risk while maintaining the same amount of business within a particular country are as follows:

1. Acquire capital from regional financial institutions
2. Appropriate a short-term range of investment
3. Choose regional workforce
4. Formulate shared investments with regional organizations
5. Get an insurance coverage

Capital from regional financial institutions will be benefited in reducing risk as interest costs will be low and available at regional rates. There won't be exchange charges or other associated costs.

Regional workforce allows us to reduce costs, savings from traveling costs, and no need to make additional funds for better living of the workforce. They can be easily adapted to work in a familiar environment and works efficiently,

By taking insurance we can have advantages like the risk is distributed, helps the company to work efficiently, and produces financial security.

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