Risk that affects many businesses at the same time is called _____ risk, while risk associated with individual businesses is called _____ risk.
A) asymmetric; symmetric
B) symmetric; asymmetric
C) systematic; idiosyncratic
D) idiosyncratic; systematic

Question

Quizplus · Accepted Answer

Systematic risk affects the entire market or economy, while idiosyncratic risk only affects an individual business. Another way to remember this is that systematic risk is also known as market risk, while idiosyncratic risk is also known as company-specific risk. Choice A and B are incorrect because asymmetric and symmetric do not accurately describe the type of risk being discussed.

Risk That Affects Many Businesses at the Same Time Is