Systematic risk is also referred to as ________.
A) business specific risk
B) internal risk
C) nondiversifiable risk
D) maturity risk

Question

Quizplus · Accepted Answer

Systematic risk, also known as market risk, cannot be diversified away as it is inherent in the overall market or economy. It affects all securities in the market, and therefore is nondiversifiable. Options A and B refer to company-specific risks, which are diversifiable. Option D refers to the risk associated with changes in interest rates, and is not applicable to the concept of systematic risk.

Systematic Risk Is Also Referred to as ________