Systematic risk can be defined as

Question

Quizplus · Accepted Answer

Systematic risk refers to the risk that is inherent in the entire market or a particular segment of the market. It cannot be diversified away by holding a diversified portfolio of securities. The added risk that a firm's shares bring to a diversified portfolio is known as systematic risk. Therefore, option C is the correct choice. Option A is incorrect because it refers to total risk, which includes both systematic and unsystematic risk. Option B is incorrect because it refers to the risk of an individual security, which is a part of unsystematic risk. Option D is incorrect because systematic risk cannot be diversified away.

Systematic Risk Can Be Defined as