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Home > QFINANCE Dictionary > Definition of country risk

Definition of

country risk

International Trade

risk of doing business in particular country the risk associated with undertaking transactions with, or holding assets in, a particular country. Sources of risk might be political, economic, or regulatory instability affecting overseas taxation, repatriation of profits, nationalization, currency stability, etc.

Recommended Further Reading (Term count)
  • Measuring Country Risk
    by Aswath Damodaran
    Two key questions must be addressed when investing in emerging markets in Asia, Latin America, and Eastern Europe. The first relates to whether we should impose an additional risk premium when valuing equities in these markets. As we will see, the answer will depend upon whether we view markets to be open or segmented and whether we believe the risk can be diversified away. The second question relates to estimating an equity risk premium for...
  • Islamic Capital Markets: The Role of Sukuk
    by Rodney Wilson
    Islamic capital markets are made up of two components, stock markets and bond markets. This contribution is primarily concerned with the latter rather than shariah-compliant stock determination. In particular it is sukuk that have become the accepted Islamic alternative to conventional bills, bonds, and notes, and hence are the major focus here.Conventional capital market instruments such as treasury bills, bonds, and notes are unacceptable from...
  • How to Manage Emerging Market Risks with Third Party Insurance
    by Rod Morris
    There are numerous issues that investors and companies must consider when contemplating an investment in a foreign country. Take for example, cultural differences, the tax regime, foreign currency exchange restrictions, the regulatory and legal environment, the judicial system, and security requirements for both assets and employees. For emerging markets in particular, each of these factors can be further complicated by the potential for...
  • Applying Stress-Testing to Operational Risk Exposure
    This checklist explains why measuring and identifying exposure to risk has become essential and why the use of stress-testing—a prime tool of risk management—has increased dramatically.

Definitions of ’country risk’ and meaning of ’country risk’ are from the book publication, QFINANCE – The Ultimate Resource, © 2009 Bloomsbury Information Ltd. Find definitions for ’country risk’ and other financial terms with our online QFINANCE Financial Dictionary.

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