Political risk can best be effectively reduced or eliminated

Question

Quizplus · Accepted Answer

Political risk can never be completely eliminated, but it can be reduced through diversification. By investing in a variety of countries and regions, investors can spread their risk and minimize the impact of any one country's political instability or economic downturn. Investing only in one region, such as Europe or only in friendly countries to the US, would still leave the portfolio vulnerable to events specific to that region or country.

Political Risk Can Best Be Effectively Reduced or Eliminated