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Investments glossary

Legislative Risk


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It is especially important to encourage unorthodox thinking when the situation is critical At such moments every new word and fresh thought is more precious than gold. Indeed, people must not be deprived of the right to think their own thoughts.

— Boris Nikolayevich Yeltsin

Legislative risk is the potential that regulations or legislation by the government could significantly alter the business prospects of one or more companies. These changes can adversely affect investment holdings in that company. Legislative risk may occur as a direct result of government action or by altering the demand patterns of the company’s customers.

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