In terms of the stock market,systematic risk refers to the fact that
A) some stocks have higher returns than others.
B) some stocks' returns have a higher variance than others.
C) all stock prices are correlated with the health of the economy.
D) most stock prices are perfectly negatively correlated.

Question

Quizplus · Accepted Answer

Systematic risk refers to the risk inherent to the entire market or an entire market segment. It is also known as market risk, and it cannot be diversified away through portfolio management. The health of the economy affects the performance of all stocks, making them correlated and subject to systematic risk. Options A, B, and D refer to unsystematic risk, which can be diversified away through proper portfolio management.

In Terms of the Stock Market,systematic Risk Refers to the Fact