What best describes political risk?

Political risk refers to the potential impact that political actions or instability within a country can have on a business or economic environment. This includes government decisions, social unrest, or changes in legislation that could influence the operational landscape for businesses.

In the context of this question, describing political risk as the potential actions of individuals and groups aligns with the reality that such actions can significantly alter the financial stability of both a country and the businesses operating within it. Factors such as changes in government, conflicts, and populist movements can lead to uncertainties that directly affect investments and business operations.

The other options focus on different types of risks that do not directly relate to the political environment. Natural disasters, inaccurate financial reporting, and resource scarcity each have their own categories of risk that are not included under the umbrella of political risk. This distinction underscores the unique nature of political risk as it pertains to the activities and decisions that can arise from the political sphere.