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Government, Law, and Political Risk in International Business - Coggle…

- - - - Government in which supreme power is vested in the people and exercised by them directly or indirectly through a system of representation usually involving periodic free elections.
    - - Government that holds power and makes policies without the consent of the people that it rules.
    - - Government in which a person, the monarch, is head of state for life or until abdication.
  - - - Tax imposed by a government on goods and services imported from other countries that serves to increase the price and make imports less desirable, or at least less competitive, versus domestic goods and services.
    - - Government-imposed trade restriction that limits the number or monetary value of goods that a country can import or export during a particular period.
    - - Government-induced restrictions on international trade.
- - - - When investing in foreign countries, firms must consider the fact that currency exchange rates can change the price of the asset as well.
    - - A rise in interest rates during the term or debt securities hurts the performance of stocks and bonds.
    - - This refers to the risk that a country will not be able to honor its financial commitments.
    - - This represents the financial risk that a country’s government will suddenly change its policies.
    - - This is the risk that a company or individual will be unable to pay the contractual interest or principal on its debt obligations.
    - - It is the day-to-day fluctuations in a stock’s price. It is also referred to as volatility.