Inflation, war, political upheaval, and other broad economic events cause:

Question

Quizplus · Accepted Answer

These types of broad economic events affect the entire market and cannot be diversified away through diversification of individual stocks. This type of risk is known as market risk. Business specific risk (A) and diversifiable risk (B) refer to risks that affect individual stocks and can be mitigated through diversification. Non-diversifiable unsystematic risk (C) is not a commonly used term in finance and does not accurately describe the potential effects of broad economic events on the market.

Inflation, War, Political Upheaval, and Other Broad Economic Events Cause