🎓CFA Final Prep All Topics

Geopolitical Risk & Portfolio Impact

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Question

How does exogenous geopolitical risk differ from event risk?

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Answer

It is a sudden external shock rather than a scheduled discrete event.

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Question

What characterizes thematic geopolitical risk for investors?

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Answer

A slow structural shift affecting markets over time.

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Question

What does event risk mean in geopolitical analysis for investments?

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Answer

A discrete geopolitical event that can quickly reprice assets.

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Question

Why does heightened geopolitical risk often strengthen safe-haven currencies?

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Answer

Capital seeks safety, increasing demand for perceived haven currencies.

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