Most emerging markets countries are not well integrated into global markets, and this can increase the cost of capital yet provide a measure of insulation from risks in global markets. Which of the following types of risks is applicable here?

Question

Quizplus · Accepted Answer

The risk being described is market risk, specifically the risk of fluctuations in global markets affecting the cost of capital in emerging markets. Market risk hedging can help manage this risk. Regulatory risk, financial restrictions, and political corruption may also be factors affecting emerging markets, but they are not directly applicable to the situation described in the question.

Most Emerging Markets Countries Are Not Well Integrated into Global