Examples of political and regulatory risk include
A)changes in the tax deductibility of interest on municipal bonds.
B)changes in the capital gains tax rate.
C)changes in the exchange rates.
D)All of the above are correct.
E)Only A and B are correct.

Question

Quizplus · Accepted Answer

Changes in the tax deductibility of interest on municipal bonds and changes in the capital gains tax rate are both examples of political risk. These are policy decisions made by government entities that can affect the financial outcome of investments. Changes in exchange rates, however, are more closely related to economic risk rather than political or regulatory risk.

Examples of Political and Regulatory Risk Include