Systematic risk is defined as:
A) a risk that specifically affects an asset or small group of assets.
B) any risk that affects a large number of assets.
C) any risk that has a huge impact on the return of a security.
D) the random component of return.
E) None of these.

Question

Quizplus · Accepted Answer

Systematic risk refers to the risk that affects a large number of assets, such as economic recessions or political instability. It is not specific to any particular asset or small group of assets, and it cannot be diversified away through portfolio diversification.

Systematic Risk Is Defined As