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A systemic political risk is: When government interferes with business transactions and constrains flexibility of local...

A systemic political risk is:

When government interferes with business transactions and constrains flexibility of local operations

When governments change public policies, it creates risks that affect all firms.

When governments want to claim larger shares of revenues generated by foreign companies, it gradually eliminates local property rights of foreign companies

A risk that devastates the business environment and affects the operations of all firms in a country

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Answer #1

Answer is "When governments change public policies, it creates risks that affect all firms."

A systemic political risk is a type of risk which affects all the businesses and is faced by government, investors and companies. The change in policies instantly affect all businesses in the country.
The first and third options affect only a sect of companies in the nation while the fourth option does not mention any involvement of political factors for risk creation. Hence the answer is second option.

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