Country Risk Definition:

Country risk refers to the potential economic, political, and financial uncertainties that may impact investments and business operations within a specific country. These uncertainties can include political instability, changes in government policies, economic downturns, regulatory changes, and other factors that could adversely affect the profitability and stability of investments in that country.

Objective Type Question:

In accounting, which of the following accurately describes "country risk"?

a$)$ The risk associated with individual companies within a country.

b$)$ The risk of political, economic, and financial uncertainties impacting investments in a particular country.

c$)$ The risk of exchange rate fluctuations affecting international trade.

d$)$ The risk of inflation eroding the value of a country's currency.