Question

Krista invested money in the stock of a foreign company. Lately, the government of the country where the company is based introduced new tax laws and fiscal policies. What type of risk does Krista face as an investor?

Answer 1

c

Explanation:

Answer 2

Answer: legislative risk

Explanation:

Legislative risk refers to a form of risk whereby there's likelihood of a business making a loss on an investment due to governmental action.

Legislative risk implies an amendment or an abolition of laws which has a direct impact on investments. Regarding the question, the introduction of the new tax laws and fiscal policies is a legislative risk.