Systematic risk is:
A) The risk that can be eliminated through diversification.
B) The risk that affects all securities.
C) The total risk of a well-diversified portfolio.
D) The risk that cannot be diversified by portfolio combination.
E) b and d only.

Question

Quizplus · Accepted Answer

Systematic risk, also known as market risk, affects the entire market or a large segment of the market and cannot be eliminated through diversification. This includes risks from macroeconomic factors such as inflation, changes in interest rates, and political instability. Choices B and D accurately describe systematic risk.

Systematic Risk Is