Products & RisksQuestion 42 of 125
Systematic risk refers to:
a.The risk unique to a single company that can be diversified away
b.Market-wide risk that affects nearly all securities and cannot be eliminated through diversification
c.The risk that a bond issuer defaults
d.The risk of buying at the wrong time of day
Explanation
Systematic (market) risk affects the entire market or broad asset classes and cannot be diversified away; examples include recessions and broad interest rate moves. Unsystematic (nonsystematic) risk is company- or industry-specific and can be reduced through diversification.
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