Which statement best characterizes economic events such as inflation,recession,and high interest rates?
A)They are systematic risk factors that can be diversified away.
B)They are company-specific risk factors that can be diversified away.
C)They are among the factors that are responsible for market risk.
D)They are risks that are beyond the control of investors and thus should not be considered by security analysts or portfolio managers.

Question

Quizplus · Accepted Answer

Economic events such as inflation, recession, and high interest rates are macroeconomic factors that are responsible for market risk. They affect the overall economy and thereby impact a wide range of companies and industries, making it difficult to diversify away from them. Therefore, investors and portfolio managers need to consider them while making investment decisions.

Which Statement Best Characterizes Economic Events Such as Inflation,recession,and High