Question

Which of the following risk arises when an otherwise profitable investment is impaired as a result of adverse legislation, harsh regulatory climate or nationalization by a socialistic Government?

a.

Market risk

b.

Interest rate risk

c.

Social or Regulatory risk

d.

Purchasing power risk

Answer: (c).Social or Regulatory risk Explanation:Social or Regulatory risk arises when an otherwise profitable investment is impaired due to adverse legislation, a harsh regulatory climate, or nationalization by a socialistic government. This risk is associated with changes in laws, regulations, or government policies that negatively impact the profitability or viability of an investment.

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Q. Which of the following risk arises when an otherwise profitable investment is impaired as a result of adverse legislation, harsh regulatory climate or nationalization by a...

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