When the government of a country may possibly default on its bond payments to outside investors,the risk is referred to as

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Sovereign risk refers to the risk of a government defaulting on its financial obligations, including bond payments to outside investors. This can happen due to a variety of reasons such as political instability, economic downturns, or high levels of debt. The other options, political risk and nationalization risk, are also important risks that foreign investors may face, but they do not specifically pertain to the risk of default on bond payments by a government. Business risk is a separate type of risk that companies face in their operations, and it is not directly related to government bond payments.

When the Government of a Country May Possibly Default on Its