What type of investment would have a high risk premium associated with political and regulatory risk?
A)A drug company
B)A casino company
C)A tobacco company
D)All of the above are correct.

Question

Quizplus · Accepted Answer

All three industries (drug, casino, and tobacco) have high political and regulatory risk due to the potential for government regulations and lawsuits impacting their business model. Drug companies face the risk of government regulations on drug pricing, while casino companies face the risk of changes in gambling laws. Tobacco companies face the risk of increasing taxes and regulations on tobacco products. All of these factors can greatly impact the profitability of these companies and result in a higher risk premium for investors.

What Type of Investment Would Have a High Risk Premium