The relevant portion of an asset's risk,attributable to market factors that affect all firms,is called ________.
A)credit risk
B)diversifiable risk
C)systematic risk
D)maturity risk

Question

Quizplus · Accepted Answer

Systematic risk, also known as non-diversifiable risk, refers to the portion of an asset's risk that is attributable to market factors affecting all firms, such as changes in interest rates, inflation, political turmoil, etc. Credit risk is specific to a particular company or bond issuer and refers to the risk of default or non-payment of debt. Diversifiable risk, also known as unsystematic risk, is company-specific risk that can be reduced through diversification. Maturity risk refers to the risk associated with changes in interest rates over the lifespan of a bond.

The Relevant Portion of an Asset's Risk,attributable to Market Factors