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Mumz [18]
2 years ago
13

Country risk included in the risk premium in interest rates refers to the:

Business
1 answer:
NISA [10]2 years ago
8 0

Answer:

The correct option here is B) the probability of loans not getting repaid in some countries because of political upheaval.

Explanation:

The risk premium is a return on investment that one expects it will yield, this is the return which is in excess of risk free rate of return.

In the risk premium for interest rate it includes both country risk and future exchange rate changes. Where country risk refers to a situation where there is a good chance that loans in some countries won't be repaid due to the political upheaval.

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