Sovereign Risk Involves the Inability of a Foreign Corporation to Repay

question 33

True/False

Sovereign risk involves the inability of a foreign corporation to repay the principal or interest on a loan because of stipulations by the foreign government that are out of the control of the foreign corporation.

---

Definitions:

Unit of Resource

A specific quantity of a resource or input used in the production of goods or services.

Deforestation

The removal of a forest or stand of trees from land which is then converted to a non-forest use, often resulting in ecological imbalance.

Forest Cover

The proportion of land area that is covered by forests, which is crucial for biodiversity, climate regulation, and ecosystem services.