According to the IMF's April 2025 Global Financial Stability Report, how much did global stock returns decline on average during major geopolitical risk events?​

Correct option is C

The correct answer is (c) 1%

Explanation:

• According to the International Monetary Fund's (IMF) April 2025 Global Financial Stability Report, global stock returns declined by an average of 1% during major geopolitical risk events.
• These events include international military conflicts, diplomatic tensions, and significant trade disruptions involving key trading partners.
• The report highlights that while the average decline is modest, certain events, particularly international military conflicts, can lead to more substantial declines in stock prices.
• The IMF emphasizes the importance of financial institutions enhancing their resilience to such geopolitical risks to maintain financial stability.

Information Booster:

• The IMF's analysis is based on approximately 450 major geopolitical risk events identified between 1985 and 2024, utilizing news-based indices to assess the frequency and intensity of these events.
• The report notes that the impact on stock prices can vary significantly depending on the nature and scale of the geopolitical event, with some events causing declines greater than the average.
• The IMF advises policymakers and financial institutions to strengthen capital buffers and employ stress-testing measures to mitigate the adverse effects of geopolitical risks on financial markets.

Additional Knowledge:

• The International Monetary Fund (IMF) is an international financial institution established in 1944.
• It aims to promote global monetary cooperation, ensure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.
• The IMF provides financial assistance to countries facing balance of payments problems and works to stabilize exchange rates.
• Its headquarters are located in Washington, D.C., USA.
• The IMF has 190 member countries as of 2025.
• It offers surveillance of the global economy and provides policy advice to member countries.
• The IMF also provides technical assistance and training to help countries improve their capacity to design and implement effective policies.