Task - Finance Numericals Question 13.1 Is risk of a market...

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Finance Numericals Question 13.1. Is risk of a market crash financial or political risk? The event of a stock market crash itself is the outcome of financial risk. But since a market’s frame is formed, influenced and stabilized by political conditions, it is not possible to disconnect it’s likelihood from political risk. The political conditions of a country determine it's market’s efficiency and stability, which in turn is dictated by the regime. In other words to what extent the government discourages corruption and what its political and financial priorities are. Countries that are less diversified concerning its economy and, in general, emerging markets are more vulnerable to swings in the prices of the worldwide economy. How a country reacts on external economic changes and shocks is also determined by its political stability, what leads back to the extent of political risk In the case of Russia, the stock market crash weakened the position of its recent president Yelsin which led to a change of
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This note was uploaded on 11/06/2011 for the course ECONOMICS ebc2034 taught by Professor Vaartjes during the Spring '11 term at Maastricht.

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Task - Finance Numericals Question 13.1 Is risk of a market...

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