Country Risk: Giving some measurement scores for 3 countries in the below:

Measurements UK USA Canada

Freedom House Index 93 83 98
Political Rights (40) 39 32 40
Civil Liberties 54 51 58
Economic Freedom 78.4 74.8 77.9
Business freedom 94.4 82.5 81.4
Investment Freedom 80 85 88
Tax Burden 64.9 76 76
Table: Freedom house index( Freedom House, n.d.)

According to freedom house index, three countries are completely free and scores are more than
80. Also all the countries political right are in good score which is more than 30 out of 40. Civil
liberties are also above 50 for all the countries which means civil rights are very strong. In the
context of Economic freedom, all countries performed on an average 75 which means countries
market are mostly open market as their business and investment freedom also above 80. Lastly
UK has less tax burden than USA and Canada. All the countries have lower country risk.

Figure: Heat Map of Country Risk (UK, USA, Canada are mentioned in the box)
Political risk: All countries Political risk graphs are given in the below:

UK
USA

Canada
According to Marsh, here UK, USA, Canada all the countries have less political risk. Also
diagrams shows the basic factors such as civil and commotion, terrorism, war & civil war,
country economic risk, currency inconvertibility & transfer risk, sovereign credit risk,
expropriation, contractual agreement reputation and legal & regulatory risk etc. scores (Political
Risk, n.d.). All the factors scores are very decent and the time period is January 2020 to January
2021 which means those countries have less political risk also in the pandemic situation.

Currency Risk:

Currency risk can be referred as exchange rate risk. We know that, US currency is US Dollar,
Canada’s currency is Canadian Dollar and UK’s current is Pound sterling. This exchange rate
depends on interest, inflation, economic growth and current account balance etc. some core
factors. This exchange rate is fluctuating all the time so it would be difficult to measure currency
risk. However, this is also possible by following a formula (Currency Risk, n.d.). Which is:

(1 + rLocal) = (1 + rFM) (1 + rFX)

Where:

rLocal = Return on the foreign investment in Local currency

rFM = Return on the foreign market in local currency

rFX = Return on the foreign exchange

Market risk:

Market risk is the possibility that an individual or other entity will experience losses due to
factors that affect the overall performance of investments in the financial markets. As we already
know that UK, US, Canada all markets are open market. However, market risk can be evaluated
base on interest rate, equity price risk, exchange rate, commodity price risk etc. (4 economic
factors, n.d.) Besides that, this factors are not fluctuating frequently so that UK, US, Canada all
the markets has less risk. Also all the countries developed country and their economy is very
stable.
Credit Risk:

3 countries credit risk given below:

UK US Canada
Rating AA AA+ AAA
Outlook Stable Stable Stable

In terms of credit risk, these 3 countries outlook is stable.

Commercial Risk:

Not needed for this circumstances. As Anjans has not started business in UK, US and Canada
yet.
Ref:

Freedom House. (n.d.). Countries and Territories. https://freedomhouse.org/countries/freedom-

world/scores

Country Rankings: World & Global Economy Rankings on Economic Freedom. (n.d.). Index of

Ecnomic Freedom. https://www.heritage.org/index/ranking

Political Risk. (n.d.). Marsh. https://www.marsh.com/lt/en/services/political-

risk/insights/political-risk-map-2021.html

4 Economic Factors that Can Impact Your Currency Value. (n.d.). MintLife Blog.

https://mint.intuit.com/blog/personal-finance/value-of-your-money/

Currency Risk. (n.d.). Corporate Finance Institute.

https://corporatefinanceinstitute.com/resources/knowledge/trading-investing/currency-

risk/