Systematic risk is also called Blank______ risk.Multiple choice question.marketindustry-specificworldwidediversifiable
Question
Systematic risk is also called Blank______ risk.
Multiple choice question:
- market
- industry-specific
- worldwide
- diversifiable
Solution
1. Identify the Question
The question asks for the term that is synonymous with "systematic risk" from a given list of options.
2. Analyze the Options
- Market Risk: This refers to the risk of losses in financial investments due to market fluctuations.
- Industry-Specific Risk: This is the risk associated with a specific industry, such as regulatory changes or economic downturns affecting that particular sector.
- Worldwide Risk: This generally refers to risks that could impact global economies, but it is not a standard term related to systematic risk.
- Diversifiable Risk: This refers to risks that can be eliminated through diversification, also known as unsystematic risk.
3. Conclusion
Systematic risk, also known as market risk, cannot be eliminated through diversification and affects all investments in some way.
Final Answer
The correct answer is market risk.
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