Q. Political stability is primarily related to which type of risk?
Answer: Country risk
Notes: Country risk includes political stability, government stability, and political change affecting investments in a nation. International Country Risk Guide measures country risk through government stability and internal/external conflicts. Country risk can reduce or impair returns for foreign investors due to political events. Country risk is distinct from exchange risk, systematic risk, and non-systematic risk, which involve currency, market-wide, or company-specific factors.

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