Cuba and International Finance
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Prepare a word document of the genreal background information regarding the country Cuba (e.g., risk elements, with more emphasis on recent events). In a minimum of 500 words, be sure to include the following: regional transaction exposure and approach; regional translation exposure and approach; and regional operating exposure and other descriptive events or information.
Must have a minimum of 4 reference including the book Multinational Finance by Moffett, Stonehill, & Eiteman.
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Solution Summary
This response provides a brief introduction of Cuba with respect to its government and economic structure and their risk elements. Several concepts like regional transaction exposure and approach; regional translation exposure and approach; and regional operating exposure and other descriptive events or information are discussed in short.
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Cuba and Risk Elements
Cuba is a country that consists of several small islands. It is near to U.S, Mexico, Jamaica, Haiti, Bahamas etc. Cuba has a planned economy, in which, several states have equal significance in running different economic activities of the country. Therefore, it has a communist state government structure (ONEI, 2015). This type of government structure helps Cuba to increase foreign direct investment due to specific regional attractiveness. From the past few years, Cuba's economy has increased with a high growth rate due to increase in GDP and per capita income. At the same time, a decreasing unemployment rate also pushes its growth rate, but high inflation creates some challenges for it (Trading Economics, 2015).
In addition, there are certain risk elements that affects the growth of the country. The major is foreign exchange risk, which is associated with the financial transaction of one currency with another one. This risk ...
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