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Question

The risk arising from uncertain economic and social performance and discriminating economic policies of a country is termed as :

This question was previously asked in
MH SET 2025 Paper 2 Hindi Question Paper (15-Jun-2025)
The correct answer is

Country Specific Risk

Country Specific Risk option is correct.

Country-specific risk arises from the uncertain economic, political and social conditions of a particular host country -- changes in government policy, civil unrest, sovereign default and similar events that affect all firms operating there.

Other categories such as transaction risk, translation risk or operating risk relate to currency or firm-specific exposures. Hence the risk arising from uncertain economic and social performance of a country is country-specific risk.

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