Financial Case Study Example | Topics and Well Written Essays - 1500 words

Financial - Case Study Example However, this decision may not be free from the relative risks that investing in new markets and countries can carry. Various competitive forces may be at play and the firm has to strategically devise its strategies to effectively negotiate with the different risks that may arise after the investment is made. Joblot Plc’s decision to enter into Lazka may be one of the significant investment decisions that the firm has to make. However, this decision will involve a comprehensive analysis of the various important factors that will contribute towards assessing the impact of various risks. The possible sources of risks may include political risk, foreign exchange risk, market risk as well as other risks that may generally arise in due course. This report will provide a comprehensive overview of the generalized risks that Joblot Plc may face while investing into Lazka using the currency of Lazka. Further, this report will also present a set of recommendations to the Board in order to reduce these risks. Any investment that is made always carries different risks and investors have to compensate themselves in order to undertake such investment decisions. The risks, therefore, are often covered by charging the premium over an above certain rate offered by relatively risk-free investment opportunities. Such type of risks can arise due to various reasons including risks arising out of changes in the interest rates, risks arising out of changes in the rate of return offered by alternative securities, political risk etc. However, when a decision is made to make international investments, the overall scenario changes because investing internationally adds more risks to the investments and the extent of existing risks becomes more significant.