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The factors of stability that make up political risk unit of measure are strengths against shocks and shocks themselves.

What is a political risk analysis?

Political risk analysis is described as the systematic means of assessing and managing the political risks of foreign investment or international business. The scope of political risk can be quite broad. In capital market theory, for example, political risk is often defined as unsystematic risk or all nonbusiness risk.

Political risk analysts draw on their knowledge of the political, economic and social factors in a specific geographical area, to make recommendations. The ability to create business in a certain country is highly affected by that country's political environment and government policies.

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