The microchip export ban is an example of regulatory risk. The U.S. government is considering banning microchip exports to China, citing national security concerns. This is a significant risk for investors, as it highlights a lesser-known form of investing risk: regulatory risk.
Regulatory risk is the risk that a government will change its regulations in a way that negatively affects a company or industry. This can happen for a variety of reasons, such as national security concerns, environmental protection, or consumer safety.
Regulatory risk is a real and important risk for investors to consider.
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