Geopolitical Political Risk: Some foreign companies operate in countries that may face geopolitical risks, such as terrorism or potentially hostile neighbors. For example, South Korea faces the risk of an attack by North Korea. As a result, investors should carefully consider the risks associate with the countries in which they invest.
Economic and Credit Risk: Foreign companies are often dependent on the health of their host country's economy. While the U.S. has an AAA credit rating, there are many countries that have investment ratings ranging from near-perfect to well-below investment grade. And, adverse economic events in these countries could impact companies operating within.
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