bidirectional relationships with EF Code First

Migrations_Configuration.cs

using System;

namespace ConsoleApplication1.Migrations
{
    using System.Data.Entity.Migrations;

    internal sealed class Configuration : DbMigrationsConfiguration<DatabaseContext>
    {
        public Configuration()
        {
            AutomaticMigrationsEnabled = false;
        }

        protected override void Seed(DatabaseContext context)
        {
            var usa = new Country
            {
                Id = new Guid("11111111-1111-1111-1111-111111111111"),
                Name = "USA"
            };
            var brazil = new Country
            {
                Id = new Guid("22222222-2222-2222-2222-222222222222"),
                Name = "Brazil"
            };
            context.Countries.AddOrUpdate(c => c.Id, usa, brazil);
            var iowa = new State
            {
                Id = new Guid("33333333-3333-3333-3333-333333333333"),
                Name = "Iowa",
                CountryId = usa.Id
            };
            var indiana = new State
            {
                Id = new Guid("44444444-4444-4444-4444-444444444444"),
                Name = "Indiana",
                CountryId = usa.Id
            };
            context.States.AddOrUpdate(s => s.Id, iowa, indiana);
            var desMoines = new City
            {
                Id = new Guid("55555555-5555-5555-5555-555555555555"),
                Name = "Des Moines",
                StateId = iowa.Id,
                CountryId = usa.Id
            };
            var siouxCity = new City
            {
                Id = new Guid("66666666-6666-6666-6666-666666666666"),
                Name = "Sioux City",
                StateId = iowa.Id,
                CountryId = usa.Id
            };
            var indianapolis = new City
            {
                Id = new Guid("77777777-7777-7777-7777-777777777777"),
                Name = "Indianapolis",
                StateId = indiana.Id,
                CountryId = usa.Id
            };
            var terreHaute = new City
            {
                Id = new Guid("88888888-8888-8888-8888-888888888888"),
                Name = "Terre Haute",
                StateId = indiana.Id,
                CountryId = usa.Id
            };
            var washingtonDC = new City
            {
                Id = new Guid("99999999-9999-9999-9999-999999999999"),
                Name = "Washington, D.C.",
                CountryId = usa.Id
            };
            context.Cities.AddOrUpdate(c => c.Id, desMoines, siouxCity, indianapolis, terreHaute, washingtonDC);
            iowa.CapitalCityId = desMoines.Id;
            context.States.AddOrUpdate(s => s.Id, iowa);
            indiana.CapitalCityId = indianapolis.Id;
            context.States.AddOrUpdate(s => s.Id, indiana);
            usa.CapitalCityId = washingtonDC.Id;
            context.Countries.AddOrUpdate(c => c.Id, usa);
        }
    }
}

Model.cs

using System;
using System.Collections.Generic;
using System.ComponentModel.DataAnnotations;
using System.Data.Entity;
using System.Data.Entity.ModelConfiguration.Conventions;

namespace ConsoleApplication1
{
    public class Country
    {
        [Required]
        public Guid Id { get; set; }

        [Required]
        [MaxLength(100)]
        public string Name { get; set; }

        public virtual ICollection<State> States { get; set; }

        public virtual ICollection<City> Cities { get; set; }

        [ForeignKey("Capital")]
        public Guid? CapitalCityId { get; set; }

        public virtual City Capital { get; set; }
    }

    public class State
    {
        [Required]
        public Guid Id { get; set; }

        [Required]
        [MaxLength(100)]
        public string Name { get; set; }

        [Required]
        public Guid CountryId { get; set; }

        [Required]
        public virtual Country Country { get; set; }

        public virtual ICollection<City> Cities { get; set; }

        [ForeignKey("Capital")]
        public Guid? CapitalCityId { get; set; }

        public virtual City Capital { get; set; }
    }

    public class City
    {
        [Required]
        public Guid Id { get; set; }

        [Required]
        [MaxLength(100)]
        public string Name { get; set; }

        public Guid? StateId { get; set; }

        public virtual State State { get; set; }

        [Required]
        public Guid CountryId { get; set; }

        [Required]
        public virtual Country Country { get; set; }
    }

    public class DatabaseContext : DbContext
    {
        public DbSet<Country> Countries { get; set; }
        public DbSet<State> States { get; set; }
        public DbSet<City> Cities { get; set; }

        protected override void OnModelCreating(DbModelBuilder modelBuilder)
        {
            modelBuilder.Conventions.Remove<OneToManyCascadeDeleteConvention>();
            modelBuilder.Entity<City>().HasOptional(c => c.State).WithMany(s => s.Cities);
            modelBuilder.Entity<City>().HasRequired(c => c.Country).WithMany(c => c.Cities);
            base.OnModelCreating(modelBuilder);
        }
    }
}

packages.config

<?xml version="1.0" encoding="utf-8"?>
<packages>
  <package id="EntityFramework" version="4.3.0-beta1" />
</packages>

Program.cs

using System;
using System.Diagnostics;

namespace ConsoleApplication1
{
    internal class Program
    {
        private static void Main(string[] args)
        {
            Console.WriteLine("Starting verification.");
            DatabaseContext context = new DatabaseContext();
            Country usa = context.Countries.Find(new Guid("11111111-1111-1111-1111-111111111111"));
            Debug.Assert(usa.Name == "USA");
            Debug.Assert(usa.Capital.Name == "Washington, D.C.");
            City siouxCity = context.Cities.Find(new Guid("66666666-6666-6666-6666-666666666666"));
            Debug.Assert(siouxCity.State.Name == "Iowa");
            Debug.Assert(siouxCity.State.Capital.Name == "Des Moines");
            Debug.Assert(siouxCity.State.Cities.Count == 2);
            City terreHaute = context.Cities.Find(new Guid("88888888-8888-8888-8888-888888888888"));
            Debug.Assert(terreHaute.State.Capital.Name == "Indianapolis");
            Debug.Assert(terreHaute.State.Name == "Indiana");
            Debug.Assert(terreHaute.Country.Name == "USA");
            Debug.Assert(usa.States.Contains(siouxCity.State));
            Debug.Assert(usa.States.Contains(terreHaute.State.Capital.State));
            Console.WriteLine("Verification finished.");
        }
    }
}