The potential risk that financial problems can spread through financial institutions and the financial system is referred to as:

Question

Quizplus · Accepted Answer

The term "systemic" refers to a problem that affects the entire system, and in this case, the financial system. The potential risk of financial problems spreading throughout the financial system is a systemic risk, as it has the potential to affect the stability of the entire system, rather than just individual institutions (unsystematic risk) or a particular market (market risk). The term "systematic" refers to the regular or predictable nature of a particular process, so it is not the best choice in this context.

The Potential Risk That Financial Problems Can Spread Through Financial