________ risk affects all stocks to a greater or lesser extent and is due to large macroeconomic shocks.This type of risk ________ be eliminated through diversification.
A) Systematic; can
B) Systematic; cannot
C) Unsystematic; can
D) Unsystematic; cannot
E) None of the above

Question

Quizplus · Accepted Answer

Systematic risk, also referred to as non-diversifiable risk in the text, includes events such as wars, changes in government policy and oil price shocks. These events affect all risky assets in the capital market, and thus systematic risk is impossible to eliminate through diversification (although it can be reduced).

________ Risk Affects All Stocks to a Greater or Lesser