Macro Risk

Posted in Finance, Accounting and Economics Terms, Total Reads: 572
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Definition: Macro Risk

Macro risk can be defined as the risk which foreign businesses may face as result of political changes in a country. It is also sometimes known as political risk. 

E.g. after a government change the new government can be against certain policies which may affect the foreign companies so this is a Macro Risk.


Advantages:

• Making better estimates price movements of the respective assets

• Help in trading and investment strategies


Disadvantages:

• Wrong estimates on any such factor can lead to unnecessary price movements in respective assets


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