The part of a security's risk associated with economic factors that affect all firms to some extent is known as the _____.
A)diversifiable risk
B)unsystematic risk
C)stand-alone risk
D)market risk
E)business risk

Question

The part of a security's risk associated with economic factors that affect all firms to some extent is known as the _____. 
A)diversifiable risk
B)unsystematic risk
C)stand-alone risk
D)market risk
E)business risk

Quizplus · Accepted Answer

Market risk, also known as systematic risk, refers to the risk associated with economic factors that affect all firms to some extent, such as inflation, interest rates, and economic downturns. This type of risk cannot be diversified away and affects the overall market, not just a specific company or industry.

The Part of a Security's Risk Associated with Economic Factors