Which one of the following is an example of systematic risk?
A)the price of lumber declines sharply
B)airline pilots go on strike
C)the European Central Bank increases interest rates
D)a hurricane hits a tourist destination
E)people become diet conscious and avoid fast food restaurants

Question

Quizplus · Accepted Answer

Systematic risk refers to the risk that arises due to external factors such as changes in macroeconomic conditions, political events, or changes in the regulatory environment. The decision made by the European Central Bank to increase interest rates is an example of such external factors that can affect the overall risk of an investment. Option A is an example of commodity risk, option B is an example of labor risk, option D is an example of natural disaster risk, and option E is an example of consumer preference risk, all of which are not systematic risks.

Which One of the Following Is an Example of Systematic