- CFA Exams
- CFA Level I Exam
- Topic 2. Economics
- Learning Module 5. Introduction to Geopolitics
- Subject 6. Incorporating Geopolitical Risk into the Investment Process
CFA Practice Question
True or false?
For an investor with a long-time horizon, a geopolitical event, like an unpredictable event, may present a purchasing opportunity.
Correct Answer: True
On the other hand, reducing exposure to geopolitical risk may be acceptable for an investor with limited risk tolerance. On a portfolio level, geopolitical risk can influence the appropriateness of an investment security or strategy for an investor's goals, risk tolerance, and time horizon.
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