Systemic risk is the risk that a large decline in one stock's price could cause investors to sell their stock in other companies.

Question

Quizplus · Accepted Answer

Systemic risk refers to the risk of collapse of an entire financial system or entire market, due to the failure of a single entity or group of entities, which can lead to a cascading failure affecting many or all parts of the economy. It is not limited to the decline in one stock's price affecting other stocks directly.

Systemic Risk Is the Risk That a Large Decline in One