What is Macro Risk?
Macro risk is the risk that the political activity in a countryaffect the operations of foreign companies that do business in that country.
How Does Macro Risk Work?
For example, let's say the government of the country of Cyprus is facing a fiscal crisis and decides to seize a portion of all thein bank accounts held in the country. If American company Company XYZ does business in Cyprus and has a bank account there, some of its assets are therefore subject to the whims of the Cyprus government. In fact, any company doing business in Cyprus probably has a bank account there and thus faces this risk of seized assets. Accordingly, the crisis in Cyprus isn't contained to Cyprus -- it represents macro risk because it has ramifications for businesses around the world.
Why Does Macro Risk Matter?
Macro risk is a major currency valuation.for international businesses, and thus it influences returns and portfolio strategy in turn. Macro risk is also a major in
It is important to also can create macro risk.that macro risk is not always within a foreign government's control. Situations such as war, natural disaster or crop-destroying weather
Personalized Financial Plans for an Uncertain Market
In today’s uncertain market, investors are looking for answers to help them grow and protect their savings. So we partnered with Vanguard Advisers -- one of the most trusted names in finance -- to offer you a financial plan built to withstand a variety of market and economic conditions. A Vanguard advisor will craft your customized plan and then manage your savings, giving you more confidence to help you meet your goals. Click here to get started.
Read This Next
Back in the late 1990s, little old ladies became stock-picking experts. The local mailman was just as comfortable recommending Lucent and AOL as he was talking about the weekend forecast. ...Read More →