For any given country risk variable, the greater the size of the systematic risk relative to the unsystematic risk, the less important the variable is to the lender.

Question

Quizplus · Accepted Answer

The greater the size of the systematic risk relative to the unsystematic risk, the more important the variable is to the lender, as systematic risk affects the entire market and cannot be diversified away, making it crucial for lenders to consider.

For Any Given Country Risk Variable, the Greater the Size