SIE practice questionmediumPolitical/legislative risk
A new tax law significantly increases the tax rate on capital gains. Which risk does this illustrate?
- APolitical/legislative risk✓ Correct answer
- BInterest rate risk
- CMarket risk
- DCredit risk
Explanation
Why A — Political/legislative risk
Changes in laws or regulations, such as tax increases, are political/legislative risks. Interest rate, market, and credit risks are unrelated.
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