Systematic risk ____.
A) cannot be mitigated via diversification
B) can be mitigated via diversification
C) is unique to each firm
D) is affected by factors such as strikes

Question

Quizplus · Accepted Answer

Systematic risk, also known as market risk, cannot be mitigated through diversification as it is a risk that affects the entire market or industry. It is caused by factors such as economic conditions, political events, and natural disasters, and affects all companies operating within a specific market or industry. Therefore, diversification cannot eliminate the impact of such risks on an individual company's returns.

Systematic Risk ____