Which of the following is not characteristic of systemic risk?
A) Affects the larger economy
B) Cannot be diversified away
C) Arose from the mortgage housing crisis
D) Affects a specific sector of the economy

Question

Quizplus · Accepted Answer

Systemic risk refers to the risk of collapse of an entire financial system or entire market, as opposed to risk associated with any one individual entity, sector, or part of a system. It is characterized by its broad impact on the economy rather than being confined to a specific sector. Choices A, B, and C correctly describe aspects of systemic risk, while D incorrectly suggests it is limited to a specific sector.

Which of the Following Is Not Characteristic of Systemic Risk