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Government, Law, and Political Risk in International Business - Coggle…
Government, Law, and Political Risk in International Business
Types of Political Risk
. Systematic Risk:
A risk that influences a large number of assets. An
example is political events. It is virtually impossible to protect yourself against this type of risk
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specific types of risks
Credit or Default Risk:
This is the risk that a company or individual
will be unable to pay the contractual interest or principal on its debt obligations.
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Foreign Exchange Risk
firms must consider the fact that currency exchange rates can change the price of the asset as well.
Interest Rate Risk:
A rise in interest rates during the term or debt securities hurts the performance of stocks and bonds.
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The Legal Environment
Common Law
Common law is based on tradition, precedent, and custom and usage.
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