Which one of the following is the best example of systematic risk?
A)The price of lumber declines sharply
B)The airline pilots of a firm go on strike
C)The Federal Reserve increases interest rates
D)A hurricane hits a tourist destination
E)People become diet conscious and avoid fast food restaurants

Question

Quizplus · Accepted Answer

Systematic risk refers to the risk that affects the entire market or a particular segment of the market. The Federal Reserve increasing interest rates would impact the entire market, making it the best example of systematic risk. The other answer choices are examples of unsystematic or specific risk that only affect certain companies or industries.

Which One of the Following Is the Best Example of Systematic