Risk that affects all firms is called ________.
A) maturity risk
B) unsystematic risk
C) nondiversifiable risk
D) reinvestment risk

Question

Quizplus · Accepted Answer

Nondiversifiable risk, also known as market risk or systematic risk, is a risk that affects all firms in the market or economy. It cannot be avoided by diversification, and it is typically caused by macroeconomic factors such as interest rates, inflation, political instability, and natural disasters. The other options, such as maturity risk, reinvestment risk, and unsystematic risk, are specific types of risk that are not necessarily present in all firms or markets.

Risk That Affects All Firms Is Called ________