Country Risk
The risk that a country will not be able to honor its financial commitments.
Investopedia Commentary
When a country defaults it can harm the performance of all other financial instruments in that country, as well as other countries.
Related Links
What Is An Emerging Market Economy?
Investing Beyond Your Borders
See also: Counterparty Risk, Country Risk, Liquidity Risk, Political Risk, Price Risk, Reinvestment Risk, Return, Risk, Risk Averse, Risk/Return Tradeoff, Systematic Risk, Unsystematic Risk