Country Risk Definitions
Country risk: A collection of risks associated with investing in a foreign country.
Political risk: The risk that an investment’s returns could suffer as a result of political changes or instability in a country.
Sovereign risk: The risk that a foreign central bank will alter its foreign-exchange regulations thereby significantly reducing or completely nulling the value of foreign-exchange contracts.
Credit risk: The risk of a government becoming unwilling or unable to meet its loan obligations.
Economic risk: The risk that macroeconomic conditions will affect an investment.
Geostrategic risk: The risk that international events, such as wars or diplomatic initiatives, will damage business or financial interests.
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