Which one of the following represents the most serious risk that arises when the government of a foreign country makes the nation's currency inconvertible?

Question

Quizplus · Accepted Answer

Blocked funds refer to the situation where a foreign government restricts the transfer of funds earned by foreign investors out of the country. This poses a significant risk as it affects the ability of foreign investors to repatriate their profits, thereby impacting their returns. In contrast, controlled exchange rates and managed currencies may affect the value of investments, but they do not involve a complete restriction on fund transfers. Expropriation refers to the government's seizure of private assets, which is also a significant risk, but it is not directly related to a currency inconvertibility situation.

Which One of the Following Represents the Most Serious Risk