SIE practice questioneasyPolitical/legislative risk
A change in government policy results in new regulations that negatively impact a company’s industry. This is an example of:
- ABusiness risk
- BPolitical/legislative risk✓ Correct answer
- CLiquidity risk
- DInterest rate risk
Explanation
Why B — Political/legislative risk
Political/legislative risk arises from changes in law or government actions. Business risk relates more to management decisions, and the other risks are unrelated to regulatory changes.
Turn it into reps
Reading one answer is not the same as being ready
Lucky the Banker is a free practice app with 1,867+ SIE questions, weak-area tracking, and timed mock exams. No credit card, no paywall.
Related Investment Companies & Packaged Products questions
- Diversification is most effective at reducing which type of risk?
- An investor is considering purchasing $100,000 of a Class A mutual fund that charges a front-end sales load, provides…
- Which risk cannot be eliminated through diversification?
- REITs are not considered investment companies under the Investment Company Act of 1940 because: