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🏠 Home › MCQs › Pakistan Current Affairs › Question

What primarily drives the rapid outflow of foreign portfolio investment from emerging markets during geopolitical crises?

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By Zain

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Published 05 Apr 2026

A. Increased risk aversion among international investors

B. Expansionary fiscal policies by the host government

C. Significant appreciation of the local currency

D. Decrease in global energy and commodity prices

💡 Explanation:

Geopolitical instability increases perceived risk, prompting investors to move capital to 'safe-haven' assets, a phenomenon known as capital flight or the exit of 'hot money'.

📚 Topics: Pakistan Current Affairs

🎯 Exams: CSS GEN NTS PMS UK_CS US_COMP

🏷️ Tags: Geopolitics International Finance Investment Risk Macroeconomics

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