5 Paragraphs

Axetem, Inc. wants to explore the possibility of establishing a factory and a customer service center in a developing nation to take advantage of a less expensive labor force. The first step in a series of various feasibility studies is a political risk analysis. You have been asked to put together a team to start the process.

Compose a memo to your team that includes the following:

• To what does the term political risk refer?
• Give at least 3 examples of sources of political risk.
• Explain what distributive and catastrophic political risks entail, and explain which type is more likely to be a more significant factor in a developing country.