This risk of default is associated with general economy-wide or macro conditions affecting all borrowers.

Question

Quizplus · Accepted Answer

Systematic credit risk, also known as systemic risk or market risk, is the risk associated with macroeconomic or systemic factors affecting all borrowers in the market. This type of risk cannot be diversified away and affects the entire market, rather than just one specific borrower or firm.

This Risk of Default Is Associated with General Economy-Wide or Macro