country risk

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Country risk is the possibility that events may occur within a country that cause its economy to become unstable or decline, which may then cause investments based on that country’s resources to falter. Examples of events inlcude: financial problems (government default on loans, rampant inflation, currency devaluation), political events (elections or the lack thereof, war, terrorism, scandal) and natural disasters (earthquakes, hurricanes, sudden drop in agricultural production).

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