Country risk refers to the potential economic, political, and social risks that could arise when doing business in a foreign country. This can include factors such as government instability, currency exchange rates, economic policy, corruption, national security threats, and more. Country risk can affect a company’s operations, investments, and profitability, as well as the overall stability of financial markets. Therefore, it is important for companies and investors to carefully evaluate and manage country risk when making decisions about foreign investments.