The National Directory of Certified Public Accountants

Ask A CPA - Investments & Financial Planning

In Reference To The Stock Market , What Is Foreign Securities Risk?

Foreign securities risk occurs because foreign securities are generally more volatile and less liquid than U.S. securities in part because of greater political and economic risks and less public information available about the foreign countries. Issuers of foreign securities are generally not subject to the same degree of regulation as are the U.S. issuers. The reporting and accounting and auditing standard of foreign countries may differ significantly from U.S. standards.

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