Which one of the following is considered an example of systematic risk?
A)a higher inflation rate than predicted
B)an increase in overseas sales for a conglomerate,such as General Electric
C)resignation of a firm's chief financial officer
D)higher company profits than those forecasted
E)lower company sales than predicted

Question

Quizplus · Accepted Answer

Systematic risk refers to the risk that affects the entire market or a particular sector, and cannot be diversified away. A higher inflation rate than predicted is an example of systematic risk as it affects all companies operating in a particular market or industry. The other options are examples of unsystematic risk, which are risks specific to a particular company or industry and can be diversified away.

Which One of the Following Is Considered an Example of Systematic