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Government, Law, and Political Risk in International Business - Coggle…
Government, Law, and Political Risk in International Business
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Types of Political Risk
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Unsystematic Risk: this is also referred as “specific risk.”
It is risk
that affects a very small number of assets.
Risk of default or credit: This is the chance that a person or business won't be able to pay back the debt's contractual interest or principal.
Foreign exchange risk: Companies need to remember that asset prices can be affected by currency exchange rates when investing abroad.
Interest Rate Risk: Stock and bond performance suffers when interest rates rise during the term of debt securities.
Political Risk: This is the financial risk of a nation's government abruptly changing its policies. Countries in the Second and Third Worlds lack foreign investment mainly due to this.
Market Risk: Of all the risks, this is the most familiar. It refers to the fluctuation in a stock's price over time.
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