Which of the following is the best example of systematic risk?
A) The president of a firm suddenly resigns
B) Income taxes are suddenly increased
C) A warehouse burns to the ground
D) A product has to be recalled for safety reason
E) The employees of a firm walk out on strike

Question

Quizplus · Accepted Answer

Systematic risk refers to the risk inherent to the entire market or market segment, not just a particular stock or industry. It is influenced by factors like changes in government policy, natural disasters, or shifts in inflation. An increase in income taxes affects the entire economy, impacting all businesses and consumers, making it a clear example of systematic risk.

Which of the Following Is the Best Example of Systematic